Over 40 per cent of companies in the Middle East region lack risk policy, according to a survey conducted by Collaboration, Management and Control Solutions (CMCS), a UAE-based company.

CMCS is a leading regional provider of project portfolio management solutions for project-driven businesses.

The study, which focused mainly on project-based construction firms, analyzed the degrees of adoption of formal risk management policies and procedures and the importance given to risk management as a tool for business success.

A comparative survey of UK and Middle Eastern companies conducted by CMCS shows that 59 per cent of ME respondents have a risk management policy in place, as opposed to 73.5 per cent in the UK.

Of those ME organizations that do have policies, 59 per cent fully implement the policy and adhere to pre-defined procedures for risk management, compared to 73.4 per cent in the UK, the survey found.

"The results highlight the need for more improvements to the region’s risk management attitudes and practices. A risk policy is an indication of whether senior management considers risk management important to their business success or not, and has to do with the commitment to adopt risk management across the organization."

"Among the key findings from the Middle East were that 45 per cent of firms with formal risk management policies have a dedicated Risk Management Officer to handle the risk management process (UK: 51 per cent); 49 per cent do not start projects without a complete Risk Register (UK: 69.6 per cent); 61 per cent assess each risk against the probability of occurrence and impact (UK: 79.2 per cent); and 69 per cent of management identify risk response actions for high-exposure risks (UK: 72.3 per cent)."

"Although our survey indicates an upward trend in risk management adoption in the Middle East, it also shows more room for improvement in terms of policies and practices," said Bassam Samman, CEO and founder, CMCS.

"Project-based firms are encouraged to enforce better risk management frameworks in light of the volatility of their markets. While projects are inherently risky, a better understanding of potential hazards and how to prevent or deal with them puts a company in a more advantageous position, which makes sound business sense,” Samman noted.

Survey results also showed that, among Middle Eastern firms with risk management provisions, 53 per cent develop a complete risk management plan for each project (UK, 69.3 per cent); 53 per cent formally implement their plans and conduct periodic risk assessment reviews (UK, 71.5 per cent); and 46 per cent update their risk database after project completion (UK, 39.6 per cent).

Risk management studies are of significant value to the region, where project and investment failures commonly trace back to poor risk management strategies, he added.-TradeArabia News Service