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- The economy and inflation surpass talent and technology as the top risk for global business leaders next year, according to a survey from Protiviti-NC State University
Geopolitical and disruptive market risks are testing business agility and resilience
MENLO PARK, Calif., Dec. 7, 2023 /PRNewswire/ -- Economic pressures and persistent inflation have overtaken the war for talent as the top near-term risk facing business leaders around the world, according to a new survey by Protiviti and the ERM Initiative at North Carolina State University. The survey measures the most pressing business risks over the next year and decade. Beyond the economy and the talent market, business leaders are also increasingly concerned about cyber threats in both the short and long term, with this risk being the top concern of respondents over the next decade.
The 12th annual survey, "Executive Perspectives on Top Risks to 2024 and a Decade Beyond," was conducted by global consulting firm Protiviti and the Enterprise Risk Management (ERM) Initiative at Carolina State University's Poole College of Management from North. The study surveyed more than 1,100 board members and senior executives from organizations around the world in a variety of industries, asking them to rate 36 macroeconomic, strategic and operational risks over time horizons on a sliding scale of 1 to 1. 10 over a year (2024) and a decade (2034).
Top risks for 2024 There was significant rotation in top risks over the next year, with six falling out of this year's top ten list for 2024 compared to last year, including the top near-term risk. Economic conditions and inflationary pressures emerged as the top near-term risk to 2024. Continuing a trend highlighted by surveys over the past two years, finding and retaining talent while managing workplace culture and evolution remained a major concern. Of the 36 macroeconomic, strategic and operational risks assessed in the survey, the top five risks identified for 2024 are:
Top risks to 2034 Respondents also rated the expected impact of the same 36 risks over a decade, to 2034, assessing how the risk landscape could change over the next decade. The five main risks identified for 2034 are:
"The economy, inflation and cybersecurity clearly rank high on executives' risk agenda, but the best leaders realize that all of these risks are intertwined and must be addressed in their entirety, not in pieces," he explained. Matt Moore, Global Risk and Compliance Leader, at Protiviti. "Senior managers and boards of directors must be agile to address concerns on a variety of strategic and operational fronts and keep up with the speed of change. Leaders are expected to manage multiple external risks effectively without disruptions to operations , productivity or profitability".
Although not recorded as a major risk, geopolitical events had a significant ripple effect across the risk landscape. Before the events that took place in the Middle East on October 7, 2023, the survey found that no risk issues were classified at the "Significant Impact" level for 2024, but in responses collected after the attacks, many risks increased and four risks were rated at the "Significant Impact" level.
"It is still an open question whether or not recent economic developments and central bank policies will lead to a soft landing or a recession that would force organizations to make dramatic changes," said Carol Beaumier, senior managing director of Risk Solution. and Compliance at Protiviti and leader of the firm's global thought leadership program. "Along with this uncertain economic outlook, regulatory changes have occurred in broad and widespread areas, meaning business leaders must plan for a variety of outcomes for how these changes will impact their operations."
Looking ahead to a decade, cybersecurity is the most pressing risk issue: the risk score for cyber threats increased by more than 11% from last year's survey, by far the largest increase in risk score observed in the history of the survey. Dr. Mark Beasley, professor of Enterprise Risk Management, director of NC State's ERM Initiative and co-author of the report, said: "While the economy is the highest-ranked risk for the coming year, cyber threats have jumped to the top of the list. the list when leaders assessed the short- and long-term outlook, after not making the top five risks last year. This jump reflects growing recognition of the complex cyber risk landscape that is affected by the exponential curve of advances technological advances and what level of importance leaders are giving to these threats.
"Over the next decade, technologies such as artificial intelligence, cloud and the expected emergence of quantum computing will change the way organizations protect their data, raising important security questions," said Sameer Ansari, Global Security Leader. and Protiviti Privacy. "To quickly adapt to new technologies, many organizations are increasing their reliance on outsourcing and co-sourcing arrangements to achieve operational and marketing objectives. Additional risks arise as organizations must ensure that their external partners comply with current laws and regulations to ensure your data and your customers' data are secure."
How Companies Can Act Regardless of the time horizon, this year's survey results highlight important steps executives should take to protect their companies from risk and maximize their chances of future success. The report from Protiviti and the NC State ERM Initiative outlines next steps executives should take to address key areas of concern, including:
Available Resources The “Executive Perspectives on Top Risks to 2024 and a Decade Beyond” report from Protiviti and the North Carolina State University ERM Initiative provides detailed results and analysis broken down by company type, size, industry, geographic region, and role of the respondent. The report, along with a global webinar series, an infographic and a podcast about the survey results, is available for free download here. Protiviti's global webinar series begins with a one-hour panel discussion hosted by Protiviti's Matthew Moore and featuring executives from Protiviti, MacroPolicy Perspectives and Prudential Financial to discuss the implications of the survey findings on 11 January 2024 at 11 PM Eastern Time. Attendance is free with registration here.
About Protiviti Protiviti ( www.protiviti.com) is a global consulting firm that offers deep experience, objective insights, a personalized approach and unparalleled collaboration to help leaders face the future with confidence. Protiviti and our independent and locally owned member firms provide clients with managed and consulting solutions in finance, technology, operations, data, analytics, digital, legal, human resources, governance, risk and internal audit through our network of more of 85 offices in more than 25 countries.
Protiviti, named to the 2023 Fortune 100 Best Companies to Work For®, has served more than 80% of Fortune 100 companies and nearly 80% of Fortune 500 companies. The firm also works with smaller companies and growing, including those seeking to go public, as well as with government agencies. Protiviti is a wholly owned subsidiary of Robert Half Inc. (NYSE: RHI). Founded in 1948, Robert Half is a member of the S Index
About the North Carolina State University Enterprise Risk Management (ERM) Initiative
The Enterprise Risk Management (ERM) Initiative at North Carolina State University's Poole College of Management provides thought leadership on ERM practices and their integration with strategy and corporate governance. ERM Initiative faculty frequently work with boards and senior management teams helping them link ERM to strategy and governance, host executive workshops and educational training sessions, and publish research and think pieces on practical approaches to implementing techniques. of more effective risk supervision (www.erm.ncsu.edu).
Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer certification services.
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