Boards and C-suite executives expect a somewhat riskier business environment in 2019 and are most concerned about their company’s digital readiness.
These are the findings of the 2019 Executive Perspectives on Top Risks survey by North Carolina State University’s Enterprise Risk Management (ERM) and management consulting firm Protiviti. The survey shows noticeable shifts in what constitutes the top 10 risks for the coming year – with challenges surrounding digital transformation jumping to the number one spot for 2019 from tenth place in 2018. The ability of their company’s existing operations to meet performance expectations, as well as competitors that are “born digital”, are the top contributors to the risk dialogue in boardrooms and executive suites.
The top 10 risks for 2019, as outlined by the study, include:
1. Existing operations meeting performance expectations, competing against “born digital” firms;
2. Succession challenges and ability to attract and retain top talent;
3. Regulatory changes and regulatory scrutiny;
4. Cyber threats;
5. Resistance to change operations;
6. Rapid speed of disruptive innovations and new technologies;
7. Privacy/identity management and information security;
8. Inability to utilize analytics and big data;
9. Organization’s culture may not sufficiently encourage timely identification and escalation of risk issues;
10. Sustaining customer loyalty and retention.
The study also suggests that firms are generally more likely to invest in risk identification and management over the next 12 months. Board members indicated the greatest desire to devote additional time or resources to risk management efforts.
Additionally, the research pointed to organizations’ lack of willingness to engage in robust risk management dialogue and invest in appropriate tools - many of them continue to manage risks the way they have for many years.
“Now is the time for boards and C-suites to closely examine how their organization approaches risk management and oversight in the digital age to pinpoint aspects requiring significant improvement,” it added.
The 2019 Executive Perspectives on Top Risks survey reports details collected from 825 board members and executives across a number of industries from around the globe.