72 percent of global business leaders say they’re operating in a riskier world, spurred by increasingly regulated industries, advanced technology and rapid digitalization. That represents a drop of 15 percentage points from 2016, when 87 percent of global business leaders felt the world was a riskier place according to the 2017 Global Risk Landscape Report from audit and assurance, tax and advisory organization BDO USA.
The drop could indicate businesses feel more confident in the macroeconomic environment, and may reflect improvements in governance, risk management and business continuity planning.
The macro risk trends executives expect to have the most impact in the next 10 years include regulatory risk (19 percent), technological changes (16 percent) and increasing competition (13 percent).
Turbulence in the geo-political sphere
The past year’s rise in populist sentiment and political agendas across the globe, the election of President Donald Trump in the US and the Brexit vote in the United Kingdom are leaving waves in their wake. 75 percent of American respondents said the unpredictable geopolitical and economic environments would impact their business this year. 78 percent of European respondents said the same.
85 percent of global business leaders say they are not ready to tackle the challenge of technology changes and development. Almost 9 in 10 CEO respondents (88 percent) say innovation and the ability to embrace technological change are the two areas for which their businesses are most unprepared.
While new technologies serve up a buffet of opportunity for companies to improve their products, build efficiencies and drive profitability, arguably the biggest challenge to implementing new technologies is managing cyber security risk.
Nine years on from the height of the global financial crisis, business leaders remain concerned about their ability to adapt to compliance pressures. With regulators addressing a variety of issues related to the conduct of financial services firms, 85 percent of leaders in the financial services sector identified regulatory risk as the biggest risk for which their firms are unprepared.
The theme of business resilience continues, and with new corporate governance codes raising the bar on risk management, there is growing recognition that responsibility for risk management ultimately comes from the top.
The 2017 BDO Global Risk Landscape Report asked 500 C-suite leaders, board and audit committee members in all major industries in 55 countries, including the US and across Europe, the Middle East, Africa, Asia and the Americas, what they see as the biggest risks facing their businesses now and into the future.
Obtain the report (registration required).