GLOBAL - A survey of multinationals by consultancy Mercer has found that fewer than one in five companies are satisfied with existing governance structures for their employee benefit programmes.
An overwhelming majority said the schemes posed a reputational risk and could affect the organisation's overall business plan, while 81% said existing plans posed a financial risk.
Vicki Stokoe, responsible for global governance consulting at Mercer, said many companies had failed to anticipate the impact of the financial crisis on their benefit plans.
Stokoe said: "[Companies] paid insufficient attention to risk management activities, such as scenario planning and extreme event modelling.
"To make matters worse, companies lacking ready access to key information or without an established decision-making structure struggled to respond quickly and effectively."
Of the 114 companies surveyed, half said they needed information faster, while 30% said they would implement changes to they way they report.
Stokoe said that if information was key to combating risk, investment in the correct systems were a must.
"In fact, failing to do this increases risk, as gaps in information represent risk that has not yet been assessed or monitored," she said.
Only 16% of those surveyed were happy with their governance arrangements, while 77% were looking into changes that would improve global risk management.
Mercer also noted that with increasing volatility came increased interest from other sources, with one in five reporting increased interest from board directors and almost a quarter saying benefit plans were being scrutinised by shareholders more than in the past.
Stokoe said companies focused on plan design and funding decisions to the detriment of investment policy, suggesting an integrated approach was the best way to tackle risk.
She added: "Current policy and oversight suggest these risks are not yet fully appreciated - to the detriment of workforce planning and employee relations."