In the ever-evolving landscape of global business, risk management is more critical than ever. A recent survey conducted by Protiviti and North Carolina State University’s Enterprise Risk Management (ERM) Initiative sheds light on the most pressing concerns facing organizations today. This annual survey, the 13th of its kind, offers a comprehensive outlook on both near-term and long-term risks that leaders must navigate. With economic uncertainty and volatility topping the list, the findings underscore the need for strategic foresight and resilience among business leaders.
Understanding the Core Risks
One of the most striking revelations from the survey is that economic conditions—including inflationary pressures—remain the primary concern for global business leaders. With geopolitical upheaval, tariffs, and emerging technologies reshaping the economic landscape, leaders find themselves grappling with a multitude of uncertainties.
The survey, which involved 1,215 board members and C-suite executives from around the world, identified the top ten risks organizations face over the next two to three years. Notable among these risks are:
- Economic conditions, including inflationary pressures
- Cyber threats
- Ability to attract and retain top talent
- Labor availability and costs
- Regulatory changes
- Third-party risks
- Disruptive innovations from emerging technologies
- Adoption of AI and necessary reskilling
- New risks stemming from AI implementation
- Resistance to change
Interestingly, while resistance to change was once considered a significant risk, it has now dropped significantly in ranking, suggesting that companies are becoming more agile and adaptable in the face of growing complexity.
The Rise of Cybersecurity Concerns
Cyber threats have emerged as a monumental risk, ranking second overall behind economic conditions. With the increasing frequency and sophistication of cyberattacks, leaders need to prioritize cybersecurity as a vital part of their operational strategy. Andy Retrum, a global leader in technology risk at Protiviti, emphasizes the importance of communication between CISOs and executive teams. Understanding the cyber risk profile is essential to mitigate the impact of potential breaches, which can result in severe financial and reputational damage.
The Talent Dilemma
The ability to attract, develop, and retain talented individuals remains a significant challenge for organizations. As the workforce landscape evolves, companies must adapt to shifting labor expectations and succession planning challenges. This is further complicated by the rapid development of artificial intelligence technologies, which necessitate reskilling employees to meet new demands. Leaders must implement strategic talent management frameworks to ensure they are prepared for both current and future challenges in this arena.
Macroeconomic and Strategic Risks for the Future
Looking ahead to the year 2035, the survey highlighted many risks that are expected to persist. Economic conditions, talent availability, and regulatory changes were prominent concerns for long-term risk management strategies. Additionally, the rapid pace of technological change and geopolitical shifts are predicted to create new challenges that will require significant adaptation.
Mark Beasley, a professor at North Carolina State’s ERM Initiative, urges leaders to view risks as interconnected rather than in silos. Addressing the complexities created by AI, regulatory changes, and global events requires collaborative efforts across various departments, fostering a holistic approach to risk management.
Conferences and Further Insights
Complementing the survey findings, Protiviti will host a webinar on February 25, 2025, to delve deeper into the results and explore the interconnected nature of the risks facing organizations. This event aims to discuss strategic implications and share insights from industry experts on how to mitigate emerging risks effectively.
Collaboration and Preparation
In the face of evolving challenges, global leaders display an increasing confidence in their organization’s resilience and preparedness. The necessity for proactive engagement in risk management is clearer than ever. Companies must not only anticipate economic fluctuations and cybersecurity threats but also recognize the significant role that talent management plays in navigating these challenges. As we continue to advance towards an unpredictable future, the ability to adapt and integrate diverse strategies will be crucial for organizational success.
For more in-depth analysis and information about these insights, the “Executive Perspectives on Top Near-Term Risks and Long-Term Risks” report from Protiviti and the ERM Initiative serves as a valuable resource. Not only does it provide detailed results and analysis, but it also emphasizes the importance of understanding the interconnectedness of risks as organizations strive to thrive in a volatile environment.
