Looking to 2019, directors and C-level executives around the world are very concerned about their company’s ability to transform operations and infrastructure to compete successfully with born digital companies. This is the result of the “Executive Perspectives on Top Risks 2019” survey conducted by the global consulting firm Protiviti in collaboration with the Enterprise Risk Management (ERM) Initiative of the North Carolina State University Poole College of Management. The challenges of succession in senior management, followed by tighter regulatory changes and controls, rounded off the three most important concerns.
The survey examines the concerns of 825 board members and executives worldwide in a variety of industries. This year’s results show a significant increase in digital readiness concerns, catapulting them from 10th place in 2018 to 1st place in 2019. This leap shows that digital agility and scalability are essential for businesses. Established companies are struggling to compete with newer digital players. Most of them can work more efficiently, are more innovative, offer new digital products and services, improve the customer experience and work with agile business models.
The risk of succession in management and the ability to attract and retain talent has advanced to second place due to a tightening labour market and a growing need for digital expertise. Regulatory changes and tighter controls continue to be a major source of uncertainty, while concerns about the economic environment have been dropped from the top 10 list of risks for the first time in the seven years the research has been conducted.
Top 10 risks for 2019
Survey participants were asked to assess 30 risk issues. Below are the ten most important risks listed in the report “Executive Perspectives on Top Risks” for 2019:
- Meeting performance expectations and competition from born digital companies;
- Succession challenges and the ability to attract and retain top talent;
- Regulatory changes and regulatory controls;
- Cyber Threats;
- Resistance to corporate change;
- Fast pace of industry-changing innovations and new technologies;
- Data Protection/Identity Management and Information Security;
- Inability to use analysis and large amounts of data (big data);
- Corporate culture can prevent risk issues from being identified and escalated in a timely manner;
- Maintain customer loyalty.
Respondents to the survey stated that the global business environment in 2019 was somewhat riskier than in previous years. The survey results also indicate that companies are likely to invest more in strengthening risk identification and risk management over the next twelve months compared to the previous year.
The 2019 Executive Perspectives on Top Risks survey was conducted in autumn 2018. The respondents represent companies around the world in the public and private sectors. Sixty percent of the companies surveyed have an annual turnover of USD 1 billion or more. The survey report provides detailed insights by size and type of company, role of respondents, industry and geographic region.