REPORT: Executive Perspectives on Top Risks for 2019
Top Risks for 2019
Annually, the ERM Initiative in the Poole College of Management at North Carolina State University, in conjunction with global consulting firm Protiviti, surveys boards of directors and C-suite executives about risks on the horizon for the upcoming year. The most recent report, 2019 Executive Perspectives on Top Risks, highlights top risk concerns on the minds of executives for 2019. Boards and C-suite leaders across the globe are most concerned about their organizations’ ability to transform their operations and infrastructure so they can compete with organizations that are “born digital.” Succession challenges, followed by heightened regulatory change and scrutiny, round out the top three concerns.
Video Summary: 2019 Executive Perspectives on Top Risks Survey
Riskier Global Business Environment
The survey report – the seventh annual such research report – assesses the concerns of 825 board members and executives globally, across a variety of industries. This year’s respondents indicate that the global business environment is somewhat riskier in 2019 compared to previous years. The survey results also suggest that corporations are likely to increase investment in strengthening risk identification and management efforts over the next twelve months relative to the prior year.
“The perceived increase in the magnitude and severity of risks in today’s ever-changing landscape should prompt boards and senior executives to closely scrutinize the approaches to proactively address emerging risks,” said Dr. Mark Beasley, Professor of Enterprise Risk Management and director of NC State’s ERM Initiative. “Boards of directors and executive management teams cannot afford to manage risks casually on a reactive basis, especially considering the rapid pace of disruptive innovation and technological developments in an ever-advancing digital world.”
Digital Readiness, Succession and Talent, Regulatory Scrutiny Lead Top 10
In particular, respondents indicate a significant increase in concerns related to their organization’s digital readiness, jumping from the number ten position in 2018 to number one in 2019. The risk of succession challenges and the ability to attract and retain talent moved to number two, triggered by a tightening labor market and an increasing need for specialized digital knowledge and subject-matter expertise. Regulatory changes and heightened scrutiny continue to represent a major source of uncertainty, while concerns about economic conditions fell out of the top ten list of risks for the first time we have conducted this study.
The Top 10 Risks for 2019
Survey respondents were asked to rate 30 different risks involving macroeconomic, strategic, and operational issues. Following are the top 10 risks identified in the “Executive Perspectives on Top Risks for 2019” report:
- Our existing operations and legacy IT infrastructure may not be able to meet performance expectations related to quality, time to market, cost and innovation as well as our competitors, especially new competitors that are “born digital”
- Our organization’s succession challenges and ability to attract and retain top talent in a tightening talent market may limit our ability to achieve operational targets
- Regulatory changes and scrutiny may heighten, noticeably affecting the manner in which our products or services will be produced or delivered
- Our organization may not be sufficiently prepared to manage cyber threats that have the potential to significantly disrupt core operations and/or damage our brand
- Resistance to change may restrict our organization from making necessary adjustments to the business model and core operations
- Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces may outpace our organization’s ability to compete and/or manage the risk appropriately, without making significant changes to our business model
- Ensuring privacy/identity management and information security/system protection may require significant resources for us
- Inability to utilize data analytics and “big data” to achieve market intelligence and increase productivity and efficiency may significantly affect our management of core operations and strategic plans
- Our organization’s culture may not sufficiently encourage the timely identification and escalation of risk issues that have the potential to significantly affect our core operations and achievement of strategic objectives
- Sustaining customer loyalty and retention may be increasingly difficult due to evolving customer preferences and/or demographic shifts in our existing customer base
The 2019 Executive Perspectives on Top Risks survey was conducted in the fall of 2018, and respondents represent organizations across the globe in the public and private sectors. Sixty percent of respondents’ companies have annual revenues of $1 billion or more. The survey report provides detailed insights broken out by size and type of company, respondent role, industry and geographical region.
Additional Resources Available to Learn More
In addition to the full report, 2019 Executive Perspectives on Top Risks report from Protiviti and North Carolina State University, you may also download an Executive Summary and Infographic at the links below. A podcast highlighting the key results is also provided below.
Jump start 2019 and register for our upcoming workshops and conferences. For a list of current ERM events, click here.
A complimentary 60-minute webinar exploring the implications of the survey results will be held on December 12 at 2:00 p.m. EST, featuring NC State’s Dr. Beasley and Protiviti’s JimDeLoach and Pat Scott.