Business leaders feel their organizations'
resilience and ability to navigate a dynamically shifting risk
landscape has been battle tested
MENLO
PARK, Calif., Feb. 13,
2025 /PRNewswire/ -- Above all other concerns, the
economy remains the number one risk keeping global business leaders
up at night, according to a new survey from Protiviti and
North Carolina State University's ERM
Initiative. The survey measures the most pressing business risks
over the next 2-3 years, as well as a decade later. Economic
uncertainty and volatility are expected to persist as leaders
grapple with inflation, tariffs, geopolitical upheaval, growth in
AI and other emerging technologies, and upcoming policy changes
from new administrations globally.
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The 13th annual survey, "Executive Perspectives on Top Near- and
Long-Term Risks," polled 1,215 board members and C-suite
executives around the world about their views on 32 macroeconomic,
strategic and operational risks facing their companies over the
near-term (two to three years ahead) and the long-term (a decade
later). In today's interconnected risk landscape, business leaders
face complex uncertainties but feel better prepared to operate in a
volatile environment and keep pace with change.
Top 10 Global Risks (over the next 2–3 years)
- Economic conditions, including inflationary pressures
- Cyber threats
- Ability to attract, develop and retain top talent, manage
shifts in labor expectations, and address succession
challenges
- Talent and labor availability
- Increases in labor costs
- Heightened regulatory change, uncertainty and scrutiny
- Third-party risks
- Rapid speed of disruptive innovations enabled by new and
emerging technologies and/or other market forces
- Adoption of AI and other emerging technologies requiring new
skills in short supply
- Emergence of new risks from implementing artificial
intelligence
A notable change in the results is that board members and
executives generally feel more positive about their organizations'
resilience, agility and preparedness to deal with crises or changes
in the market. Resistance to change was ranked as the fourth
biggest risk for companies in 2023 and has fallen to 17th place for
this year's survey, indicating that companies have established more
agile business models and frameworks for identifying and responding
to the unexpected with an increased level of flexibility in their
strategic approaches.
"Despite the volatile economic environment with deglobalization,
tariffs and the threat of trade wars, and changing regulation,
leaders are feeling more confident that their organizations are
battle-tested and better prepared to deal with disruption whether
it's anticipated or not," said Matt
Moore, Global Leader of Risk & Compliance at Protiviti.
"Global leaders will need to tap into this confidence to adapt to
evolving policies and a dynamic business landscape in the U.S. and
abroad."
Talent Risks Remain High: AI Risks Permeate
Everything
Risks related to talent – whether challenges about attracting and
retaining talent or increasing labor costs – occupy three of the
top five short-term risks, indicating significant ongoing
challenges. It is now clear that the risks AI poses are embedded in
several of the other top 10 risks. This is especially true when
looking at the talent-related risks. As AI technology evolves to
agentic AI and physical AI, this will require widespread reskilling
and upskilling, so that workforces are prepared to meet the demands
of the future.
It's Not "If" But "When" For Cyber Attacks
Boards and C-suite leaders ranked cyber threats as the second most
concerning risk over the next two to three years, outranked only by
the economy. Cyber threats also represent the most-cited long-term
operational risk for executives, with 31% selecting it among their
two most concerning operational risk issues for the next
decade.
"The widespread impacts of a cyber event permeate an entire
company, which result in a number of potential risks – operational,
financial, reputational and beyond. It's imperative that CISOs have
open and honest conversations with senior leadership and board
members on the organization's cyber risk profile. These discussions
inform the steps taken to manage the variety of cyber threats that
companies must face - including everything from risk of third
parties with access to the company's data or environment to nation
state-sponsored attacks," said Andy
Retrum, Global Leader, Technology Risk & Resilience,
Protiviti.
The Road Ahead: Top Risks for 2035
The study asked respondents to rank their top two risks a decade
out across three risk categories:
Macroeconomic risk outlook:
- Economic conditions, including inflationary pressures
- Talent and labor availability
Strategic risk outlook:
- Heightened regulatory change, uncertainty and scrutiny
- Rapid speed of disruptive innovations enabled by new and
emerging technologies and/or other market forces
Operational risk outlook:
- Cyber threats
- Ability to attract, develop and retain top talent, manage
shifts in labor expectations, and address succession
challenges
Many of the near-term risks continue to show up in the long-term
assessment – the economy, talent and cyber remain center stage.
While leaders may be confident about their ability to deal with
change, it's clear that the impacts of today's risks are expected
to persist into the next decade.
It is not just the top risks, but those a little further down
the list that give insight into the risks on the rise for the next
decade. Just over one-fifth (22%) of global executives ranked
geopolitical shifts as one of their top two macroeconomic risks
over the long term. Customer loyalty (22%) and supply chain (16%)
were also on the minds of survey respondents, with a sizeable
number selecting them as one of their top two operational and
strategic risks respectively.
Dr. Mark Beasley, professor of
Enterprise Risk Management, director of North
Carolina State University's ERM Initiative and co-author of
the report, said: "The best companies will see these risks as
inherently interconnected. Too often, companies are looking at
risks in silos where one hand isn't consistently talking to the
other. To address the future impacts of AI, geopolitical events and
regulation, executives will need effective collaboration to
strengthen their organization's resilience."
Resources Available
The "Executive Perspectives on Top Near-Term Risks and Long-Term
Risks" report from Protiviti and North
Carolina State University's ERM Initiative provides detailed
results and analysis broken out across executive positions and
industry groups.
A webinar will be held Tuesday,
Feb. 25 at 1 p.m. ET, where
panelists will share key takeaways from the survey and explore the
interconnected nature of emerging risks and their strategic
implications. Panelists include Carrie
McNish, Managing Director, People & Change, Protiviti;
Constantine Boyadjiev, Risk &
Compliance Analytics Global Leader, Protiviti; and Ryan McCarthy, Senior Director, Security &
Privacy, Protiviti.
About Protiviti
Protiviti (www.protiviti.com) is a global consulting firm that
delivers deep expertise, objective insights, a tailored approach
and unparalleled collaboration to help leaders confidently face the
future. Protiviti and its independent and locally owned member
firms provide clients with consulting and managed solutions in
finance, technology, operations, data, digital, legal, HR, risk and
internal audit through a network of more than 90 offices in over 25
countries.
Named to the Fortune 100 Best Companies to Work
For® list for the 10th consecutive year, Protiviti has served
more than 80 percent of Fortune 100 and nearly 80
percent of Fortune 500 companies. The firm also works with
government agencies and smaller, growing companies, including those
looking to go public. Protiviti is a wholly owned subsidiary
of Robert Half (NYSE: RHI).
About North Carolina State
University's Enterprise Risk Management (ERM)
Initiative
The Enterprise Risk Management (ERM) Initiative in the Poole
College of Management at North Carolina State
University provides thought leadership about ERM practices
and their integration with strategy and corporate governance.
Faculty in the ERM Initiative frequently work with boards of
directors and senior management teams helping them link ERM to
strategy and governance, host executive workshops and educational
training sessions, and issue research and thought papers on
practical approaches to implementing more effective risk oversight
techniques (www.erm.ncsu.edu).
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