A recent live poll conducted among risk and compliance practitioners across Asia and the Middle East reveals a prevailing consensus that significant improvements are still necessary in the maturity of risk governance models within these regions. More than half of those surveyed expressed the belief that “significant work remains” to elevate the risk governance frameworks to a more mature and effective state, highlighting ongoing challenges amidst dynamic geopolitical, economic, and technological landscapes.
This emerging insight reflects broader findings from various studies and expert analyses emphasizing that risk governance—an integral component of enterprise risk management (ERM)—in Asia and the Middle East is still evolving and faces considerable hurdles. Properly matured risk governance models ensure that organizational leadership can identify, assess, prioritize, and manage risks in a holistic, integrated manner that supports strategic decisions and operational resilience.
Current State of Risk Governance Maturity
Risk governance maturity generally refers to the extent to which organizations have embedded structured, comprehensive processes for managing risks consistently and effectively across all levels. This includes clear ownership of risk responsibilities, formalized risk appetite statements, robust frameworks for risk identification and assessment, continuous monitoring, communication systems, and the ability to adapt to emerging threats.
In Asia and the Middle East, practitioners indicate that many organizations remain in early or intermediate phases of maturity. Leading research and reports from consulting firms and industry bodies expose that less than 10% of firms in the Middle East consider themselves highly mature in managing enterprise risks, a percentage that echoes across certain Asian markets as well. This points to a broad necessity for enhancing risk integration into organizational strategy, operationalizing risk culture, and reinforcing governance mechanisms to align with global best practices.
Key Challenges Identified
The live poll findings align with documented challenges impacting risk governance development in these regions:
- Fragmented Risk Ownership: Many companies lack clear risk ownership structures. Risk responsibilities may be dispersed or not well defined, creating gaps and overlaps that undermine accountability.
- Inconsistent Risk Assessment and Reporting: Without uniform methodologies, organizations struggle to present coherent risk data to decision-makers, hindering timely and informed action.
- Limited Adoption of Maturity Models: While some countries and organizations are experimenting with maturity assessment models to gauge risk capabilities, widespread adoption and refinement remain limited. This prevents clear visibility over capability gaps and prioritized improvement.
- Regulatory and Market Volatility: Geopolitical tensions, regulatory developments, and economic uncertainties in Asia and the Middle East complicate risk forecasting and stress the need for adaptive governance.
- Technological and Cybersecurity Risks: The rising threat of digital disruption and cyberattacks demands governance frameworks that can address technology-driven risks effectively. However, cybersecurity governance is still emerging as a core focus area.
Progress and Positive Trends
Despite these challenges, there are positive signals of progress and momentum towards maturity improvement:
- Governments in some countries, such as Korea and Israel, have begun applying maturity assessment frameworks to national risk governance systems, identifying gaps and implementing strategic plans that adapt to emerging risks.
- Increasing awareness of the importance of integrated risk management is leading organizations to establish enterprise-wide risk committees, improve risk communication channels, and invest in capability-building.
- Industry reports signal growing audit efforts focused on cybersecurity, business continuity, and governance standards, indicating a sharpening risk oversight spotlight among boards and regulators, particularly in the Middle East.
- Emerging risk exercises and scenario analysis programs are being adopted to test readiness and coordination, enhancing the practical resilience of governance systems.
Implications for Organizations and Stakeholders
The consensus from the poll underscores the urgency for organizations in Asia and the Middle East to accelerate their risk governance evolution. This includes:
- Embedding Comprehensive Frameworks: Moving beyond fragmented or ad hoc risk management practices to fully integrated ERM frameworks aligned with international standards.
- Strengthening Risk Culture: Developing leadership commitment and employee engagement that prioritize risk awareness and proactive mitigation.
- Leveraging Maturity Models: Employing maturity assessment tools systematically to identify weaknesses and track improvement over time.
- Enhancing Technology Governance: Incorporating digital risk and cybersecurity considerations explicitly into governance architectures.
- Fostering Regional and Cross-Sector Collaboration: Sharing insights, benchmarking practices, and aligning regulatory expectations to drive collective progress.
Expert Views and Statements
Industry experts emphasize that risk governance is a dynamic capability requiring concerted effort across multiple dimensions. A senior governance consultant noted, “The journey to risk governance maturity is continuous and multifaceted. Asia and the Middle East are poised for substantial advances, but these will require strong governance leadership, clear accountabilities, and investments in data and processes.”
Another compliance leader added, “The pandemic and geopolitical shifts have exposed vulnerabilities in organizational risk frameworks here. While some sectors are rapidly adapting, a majority still have foundational gaps that need urgent attention.”
Looking Ahead
As enterprises and governments in Asia and the Middle East grapple with complex, interconnected risks—ranging from climate change and digital disruption to political and economic instability—the call for mature risk governance models grows louder. The live poll clearly signals that while awareness is high, the translation into effective and consistent practice is still a work in progress.
Efforts underway at both public and private levels to implement structured maturity assessments, develop flexible strategic plans, and engage a broad spectrum of stakeholders will be pivotal. The coming years are likely to see heightened focus on governance enhancements, supported by technology, enhanced regulatory frameworks, and a growing culture of holistic risk management.
Organizations that accelerate this maturity journey will be better equipped not only to mitigate risks but also to seize emerging opportunities in a rapidly evolving global landscape.
Nathan Lynch’s article was originally published in insight.thomsonreuters on July 7, 2022