Global Business Leaders Feel Effects of a Riskier World
Nearly three quarters (72 percent) of business leaders in companies in Canada and around the world say their companies are increasingly impacted by risk and they believe we are living in a riskier world.
That's according to the BDO Global Risk Landscape Report, which surveyed 500 C-suite leaders, board and audit committee members from all major industries in 55 countries to determine what they consider the biggest risks facing their businesses, now and into the future.
The leaders cite disruptive technologies, cybersecurity threats, and reputational risks as the main challenges likely to test companies in the coming years. There was a significant reduction, however, in overall risk perception compared to BDO's 2016 survey, where 87 percent of global business leaders said they felt the world was a riskier place.
Nine years after the height of the global financial crisis, many business leaders remain deeply concerned about their ability to adapt to growing compliance pressures. With regulators continually addressing a number of issues, 85 percent of leaders identify regulatory risk as the biggest risk their businesses are not prepared to handle.
Technology represents a double-edged sword in today's marketplace, and perspectives on its benefits largely depend on whether an organization is able to leverage new production methods, regulation, and disruption to its advantage. Uncertainty lies ahead for 88 percent of CEO respondents, who say their organization's inability to embrace innovation and technological change represents the greatest risk.
In an era where high-profile data breaches continually make headlines, cyber breaches remain top of mind for many CEOs; 75 percent report cyber exposure as their main concern.
Not only are cyber breaches costly—research by IBM and the Ponemon Institute finds the average cost rose to $4 million in 2016—the long-term reputational impacts can be devastating to a company.
"We're operating in an increasingly interconnected world where risk is unavoidable, but not unmanageable," says David Prime, BDO national risk and advisory services partner. "There are a number of ways companies can manage these identified risks, but it's vital they take a proactive approach."
Overall, the global stage reflects more similarities than differences when it comes to risk perception. Companies will need to take a multi-faceted, agile approach in their search for resilient risk management policies.