At Travelers we think about risk – a lot. In fact, helping technology companies understand and manage their risk is our business. A new study by CFO Research, sponsored by Travelers, finds that the financial performance of a technology company is inextricably linked to how well it manages the entire range of risks to business execution.
This CFO Research Services report underscores the complexity of the risks facing technology businesses today. Nonfinancial risk is a growing concern, capturing more time and attention than ever before from finance executives working for technology companies.
Download the full report on this study, titled The Finance View of Nonfinancial Risk for Technology Companies:
Travelers and CFO Research collaborate to help technology industry executives stay ahead of evolving risks.Download the CFO Research Services report (.pdf) »
Nonfinancial risks are broadly defined as events or actions, other than financial transactions, that can negatively impact the operations or assets of a company. Using this definition, 62 percent of survey respondents agree that nonfinancial risk has become more of a concern in recent years. According to survey results, the top six critical nonfinancial risks faced by technology companies include:
Four of these are "red zone" risks – those that finance executives say are critical, but for which they believe their companies are less prepared. "Red zone" risks are those where respondents say their companies must take action.
Faced with a broad range of nonfinancial risks, many finance executives in the survey stress that diligence and "keeping informed" are keys to being prepared for the unknown and the unexpected. According to survey respondents, success for a technology company comes from continuously putting in the work that is required to become more proactive in their approach to managing nonfinancial risks and build a culture in which all employees are highly attuned to the consequences of nonfinancial risks. This study is based on 209 electronic survey responses from senior finance executives at U.S. companies. Survey respondents work for a variety of technology-related companies.
This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverage referenced can depend on underwriting qualifications and state regulations.