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In a time of persistent economic uncertainty, the ERM Report 2024 highlights the resilience strategies of companies across the DACH region, with Swiss firms emerging as leaders in financial stability. This year’s report, developed by the Institute of Financial Services Zug IFZ at Lucerne School of Business and the Institute for Controlling at Kiel University of Applied Sciences, provides a comprehensive analysis based on a seven-year study of 500 companies, offering insights into resilience practices that have helped organizations navigate recent “polycrises”—successive economic challenges compounded by global and regional pressures.
While companies across Germany and Austria continue to grapple with the effects of these challenges, Swiss organizations stand out for their proactive approach to risk management, robust liquidity planning, and adaptive strategic measures. Yet, despite Switzerland’s impressive resilience, the report indicates that economic strains are beginning to impact even the most stable Swiss firms. After a short recovery following the pandemic, new pressures are emerging, putting resilience strategies to the test.
Key insights from the ERM Report 2024
The ERM Report identifies three essential pillars for financial resilience that companies in the DACH region can harness to bolster their stability and adaptability: Enterprise Risk Management (ERM), Strategic Resilience, and Resource Management.
- Enterprise Risk Management (ERM): Swiss companies lead in proactive risk management, incorporating scenario analysis, stress testing, and liquidity planning. This approach enables them to detect emerging risks early and to respond quickly, preserving stability in turbulent times.
- Strategic Resilience: The report emphasizes that building resilience goes beyond finances, requiring adaptability within corporate structures and culture. Swiss firms excel here, fostering a “resilience culture” driven by leadership commitment, supply chain diversification, and agile business models that position them to seize opportunities during crises.
- Resource Management: Financially resilient companies also manage resources effectively, maintaining high equity ratios, steady revenue growth, and flexible liquidity reserves. While Swiss companies are notable for their liquidity strength, Austrian firms face heightened vulnerabilities due to higher debt levels and less adaptable cost structures. This gap underscores the importance of flexibility in financial management across the region.
A comparative view of resilience in the DACH region
The ERM Report 2024 offers a comparative analysis of resilience in the DACH region, highlighting the unique strengths and challenges within each country:
- Switzerland: Swiss firms are overrepresented among resilient companies, showcasing strong equity positions, low insolvency risks, and solid revenue growth. However, even these firms are beginning to feel the effects of compounded crises as pressures mount.
- Germany: German companies demonstrate moderate resilience, though they remain exposed to vulnerabilities within global supply chains.
- Austria: Austrian firms face greater risks due to higher debt burdens and less flexibility in cost structures, signaling an urgent need for enhanced resilience practices.
Swiss GRC’s contribution to the ERM Report 2024
Swiss GRC is proud to have contributed to the ERM Report 2024 with a guest article titled “Financial Sustainability Through Integrated Risk Management and Resilience,” authored by CEO, Besfort Kuqi, Head Marketing & Communications, Yahya Mohamed Mao, and Head Business Strategy & Business Development, Nikolai Tsenov. The article presents resilience as a cornerstone of sustainable growth, exploring how organizations can achieve long-term financial stability by embedding resilience within their core risk management frameworks.
Swiss GRC’s piece emphasizes practical strategies, such as building financial buffers, enhancing supply chain resilience, and cultivating a resilience-focused corporate culture. The article underscores that resilience is not only a defensive strategy but a pathway to sustainable growth, helping companies to build trust with stakeholders and navigate today’s complex risk landscape with confidence.
For a deeper dive into the findings and to explore Swiss GRC’s perspectives on resilience, download the full ERM Report 2024 here.
