#USA #Menlo Park #Protiviti #Economic Risks #Cyber Threats

Top Risks Facing Global Business Leaders

A recent survey conducted by Protiviti and the North Carolina State University’s ERM Initiative has revealed that the economy remains the foremost concern for business leaders worldwide. The insights gained from the survey, which involved 1,215 board members and executives, emphasize the pressing nature of various risks that companies are expected to face in the near future (over the next 2-3 years) and beyond (over the next decade).

Current Economic Landscape

Business leaders, grappling with inflation, tariffs, and geopolitical tensions, are increasingly wary of economic uncertainty. According to the survey results, nearly all respondents noted that economic conditions, particularly inflationary pressures, dominate their concerns. Executives expressed that these economic dynamics would persist, stirring up challenges as they adapt to technological advancements and policy shifts from newly established governments.

Cyber Threats: A Growing Concern

Following the economy, the survey identified cyber threats as the second most significant risk for organizations, highlighting an alarming trend where businesses increasingly face threats from malicious cyber activities. Approximately 31% of executives expressed that cyber risks represent their top long-term operational risk, stressing the importance of safeguarding their companies against potential cyber incidents. The repercussions of such attacks can be catastrophic, affecting operational efficiency, financial health, and corporate reputation.

As Andy Retrum, Global Leader, Technology Risk Resilience at Protiviti, notes, "The widespread impacts of a cyber event permeate an entire company, which results in numerous potential risks - operational, financial, reputational and beyond.” This fear necessitates active engagement between Chief Information Security Officers (CISOs) and senior leadership regarding their organization’s cyber risk profiles, enabling companies to bolster their defenses against various cyber threats.

The Talent Shortage Dilemma

The challenge of attracting, developing, and retaining top talent emerges prominently in the survey findings, ranking as the third key risk area. As companies face increasing labor costs and shifts in employee expectations, retaining top talent has become monumental. The risk of not having adequate talent to manage forthcoming technological disruptions—especially with the rise of artificial intelligence (AI)—poses an ongoing challenge that executives must navigate.

Long-Term Perspective: Risk Outlook for 2035

The survey further delved into long-term risks, projecting that many of the current concerns will persist into the next decade. Among the identified macroeconomic risks for 2035 include the same economic conditions and labor availability challenges, indicating a long-term trend that business leaders need to prepare for. Additionally, responses indicated a rise in concerns regarding regulatory changes and the rapid pace of technological innovations, echoing sentiments about the interconnected nature of these risks.

Geopolitical shifts, customer loyalty, and supply chain stability are also beginning to be recognized as potential sources of long-term risk, necessitating strategic foresight from executives as they navigate an evolving business landscape.

Embracing Agility and Resilience

Despite the challenges outlined in the survey, a notable sentiment exists among executives regarding their organization’s resilience and adaptability to change. This marks a positive shift from previous surveys where resistance to change was flagged as a pertinent risk.

Matt Moore, Global Leader of Risk Compliance at Protiviti, stated, “Despite the volatile economic environment with deglobalization, tariffs, and the threat of trade wars, and changing regulation, leaders are feeling more confident that their organizations are battle-tested and better prepared to deal with disruption.” This growing sense of confidence is essential as companies seek to adjust to shifting demands and expectations.

In summary, as organizations prepare for future risks, they must acknowledge the interconnectedness of economic, talent, and technological challenges. By fostering a culture of resilience and agility, they can navigate an increasingly complex risk environment and ensure sustained success in the years to come.

Conclusion

Protiviti and North Carolina State University's report serves as a ground for executives to reflect on their risk posture and strategize accordingly to protect their interests from emerging threats. The upcoming webinar on February 25 will further unpack these findings, allowing for a broader discussion on their implications in the corporate landscape.

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About Protiviti

Protiviti is a global consulting firm specializing in deep expertise across various sectors, assisting leaders in addressing their most pressing challenges. Known for its commitment to excellence, Protiviti has worked with numerous Fortune 100 and 500 companies, cultivating an environment of informed strategy and holistic risk management to face the future with confidence.

About North Carolina State University's ERM Initiative

The ERM Initiative provides insights and practical approaches to enterprise risk management, working with executive teams and boards to integrate risk management with strategy and governance.