This is according to findings from the "Executive Perspectives on Top Risks 2020" survey conducted recently by global consulting firm
The Top 10 Risks for 2020
Survey respondents were asked to rate 30 macroeconomic, strategic and operational risks. Of those, the top 10 risks identified are as follows:
- Regulatory changes and scrutiny may impact operational resilience and production and delivery of products and services
- Economic conditions may significantly restrict growth opportunities
- Succession challenges and ability to attract and retain top talent may be more difficult
- Limited operational resilience of legacy IT infrastructure and digital capabilities may restrict the organization's ability to compete with "born digital" players
- Resistance to change may restrict organizational agility
- Preparedness to manage cyber threats may be insufficient
- Ensuring privacy/identity management and information security/system protection may be challenging
- Company culture may not empower timely identification and escalation of risk issues
- Sustaining customer loyalty and retention may be increasingly difficult
- Adoption of AI-enabled technologies may require new skills that are either in short supply or require significant upskilling/reskilling of existing employees
"Nearly half of the top risks this year are related to culture and attracting and retaining top talent. This is happening at a time when organizations need to execute increasingly complex strategies to navigate the rapidly changing digitally-based business environment," said
While several of the risks remain consistent with findings from previous years, including concerns around regulation, cyber threats, operational resilience, privacy management and information security, this year's results show an escalation of anxiety related to overall economic issues across domestic and international markets – climbing from number 11 last year to the number two risk concern for 2020.
Dr.
Given the relative riskiness of the business environment, now may be the time for boards and C-suites to closely examine how their organizations approach risk management and oversight in the digital age to pinpoint aspects requiring significant improvement. To that end, the Protiviti-NC State report includes a call to action, offering executives and directors diagnostic questions to consider when evaluating their own risk assessment and risk management processes. These diagnostic questions address five topical areas:
- Assessing impact of leadership and culture on our risk management process, e.g., is the organization's culture affecting how employees engage in risk management processes and conversations and, if so, how do we know?
- Ensuring a sufficiently robust risk management approach, e.g., is the risk management process supported by an effective, robust methodology that is definable, repeatable and understood by key stakeholders?
- Evaluating whether the risk focus is sufficiently comprehensive, e.g., to what extent is the company's focus on external risks linked to geopolitical shifts, emerging disruptive innovations and changes in macroeconomic factors?
- Clarifying accountabilities for managing risks, e.g., is there actionable, current risk information that is widely shared to enable more informed decision-making?
- Communicating an enterprise view of top risks and board risk oversight, e.g., is there a periodic board-level dialogue regarding management's appetite for risk-taking and whether the organization's risk profile is consistent with that risk appetite?
Resources Available; Webinar on December 18
The "Executive Perspectives on Top Risks 2020" report from
About the
The Enterprise Risk Management (ERM) Initiative in the
About Protiviti
Protiviti (www.protiviti.com) is a global consulting firm that delivers deep expertise, objective insights, a tailored approach and unparalleled collaboration to help leaders confidently face the future. Through its network of more than 85 offices in over 25 countries, Protiviti and its independent and locally owned Member Firms provide clients with consulting solutions in finance, technology, operations, data, analytics, governance, risk and internal audit.
Named to the 2019 Fortune 100 Best Companies to Work For® list, Protiviti has served more than 60 percent of Fortune 1000® and 35 percent of Fortune Global 500® companies. The firm also works with smaller, growing companies, including those looking to go public, as well as with government agencies. Protiviti is a wholly owned subsidiary of
Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services.
Editor's note: Photos and infographics (PDF or JPEG) available upon request.
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