Zaur Gurbanov: Many Azerbaijani companies lack risk management system

Many local companies in Azerbaijan have not yet developed a comprehensive risk management system, SOCAR Vice President Zaur Gurbanov said at the "First Annual Risk and Resilience Conference in Azerbaijan," organized by AmCham Azerbaijan (American Chamber of Commerce in Azerbaijan), Report informs.

He stated that without such a system, companies manage risks primarily at the operational level and based on personal experience.

"Even if some companies have a risk management system, its formal nature and lack of practical implementation create risks in themselves. When new threats emerge and a systematic approach is lacking, companies begin to react after the fact. This creates serious problems for businesses," Gurbanov noted.

He emphasized that identifying risks, assessing their likelihood, creating a risk register, and monitoring mitigation measures should be an integral part of the management system.

At the same time, Gurbanov noted that the most developed risk management practices in Azerbaijan are observed in the financial sector, particularly in banking and insurance.

"This is related to both legislative requirements and regulatory requirements, as the financial sector bears not only its own risks but also those of other economic entities," he said.

Gurbanov added that the country's business environment primarily needs to create practical and simple risk management mechanisms.