Organizations tend to separate their risk management decision making from their overall business strategy discussions, and that needs to change.

This was one of the key takeaways for finance professionals in AICPA’s latest “State of Risk Oversight” report, according to one of its co-authors.

“One of the challenges we observe, and have observed for quite a while, is this sort of separation of how an organization manages and thinks about risk and how it manages and thinks about strategy,” Mark Beasley—co-author of the report, professor at the Poole College of Management at North Carolina State University, and director of its Enterprise Risk Management Initiative—told CFO Brew.

Frequently, C-suite leaders take charge of strategy and leave risk management to departments across the company such as legal, IT, insurance, or elsewhere, and often those risk managers do not communicate with each other, Beasley said.

“It’s not that entities don’t manage risk, but often they struggle to reconnect risk and strategy, to really integrate risk thinking as they think about strategy thinking,” Beasley said. “Pretty much every business leader understands risk and return go together…Well, unfortunately, the way we manage that practically, we separate it.”

For more on incorporating risk management and strategy, click here.—AZ

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Arm is the foundation for the largest installed base of compute devices on the planet and is proudly NASDAQ-listed. Arm is at the center of the AI revolution, and the growth potential of AI is lookin’ pretty good—especially its potential to change entire industries.

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The financial consequences of cyberattacks keep on skyrocketing.

In a new report chock full of things for risk-minded business leaders to worry about, cyber insurer Resilience noted that nearly half (48%) of the claims it received in 2023 involved ransomware. A majority (64%) of ransomware claims resulted in a loss, and the financial toll of those claims “went up dramatically” by 411% (!) over the previous year, the firm noted.

But attackers’ ransom demands weren’t the reason these attacks were so costly. Under 10% of Resilience clients paid extortion fees. Instead, “increasing costs to recover from ransomware attacks” are to blame, according to the report.

Merge with care. As pesky as they are, cyber criminals deserve credit for their ingenuity. They’re always finding new and creative ways to wreak havoc on organizations.

Threat actors are cashing in on the recent uptick in M&A activity by targeting business and technology consolidation processes. “Industries rely on single suppliers for critical platform services,” which opens up “a staggering number of potential new points of failure for hackers to exploit,” according to the Resilience report, which also notes that some of this year’s biggest incidents so far involved integrated tech systems or recently acquired organizations.

Click here for more on increasing cybersecurity costs.—AZ

You might want Jerome Powell on speed dial before you go through with those kitchen renovations.

In its latest earnings report, The Home Depot said it expects sales to remain strained for the rest of the year as high interest rates continue to deter homeowners from major home improvements. Now, the retailer anticipates full-year comparable sales to dip 3%–4% from last fiscal year, rather than its previously forecast 1% drop.

“During the quarter, higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,” Home Depot CEO Ted Decker said during the earnings call.

Home Depot CFO Richard McPhail told CNBC that the company has been dealing with consumers with a “deferral mindset” since mid-2023, but now, they’re increasingly cautious. “Pros tell us that, for the first time, their customers aren’t just deferring because of higher financing costs; they’re deferring because of a sense of greater uncertainty in the economy,” he said.

So, if you, like us, have been looking for a read on consumer sentiment right now, take Home Depot’s latest earnings report as a warning.

Click here to continue reading.—NP

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