MENLO PARK, Calif.,
Dec. 12, 2019 /PRNewswire/
-- Entering into a new decade, boards and C-suite leaders
around the globe are concerned with the escalating competition for
specialized talent, their organizations' culture and the ability to
advance their digital maturity and embrace the transformative
opportunities of technology. According to a new survey from
Protiviti and North Carolina State
University, business leaders contend that coupled with the
ongoing economic uncertainty and unknown future regulatory changes,
these risks could impact their ability to effectively compete, grow
their business and achieve operational targets in 2020 and
beyond.
This is according to findings from the "Executive Perspectives
on Top Risks 2020" survey conducted recently by global consulting
firm Protiviti and North Carolina State
University Poole College of Management's Enterprise Risk
Management (ERM) Initiative. Now in its eighth year, the latest
survey identified top concerns on the minds of over 1,000 board
members and C-suite executives from organizations in a variety of
industries around the globe. Nearly sixty-eight percent of survey
respondents' organizations have annual revenues between
$100 million and $10 billion.
The Top 10 Risks for 2020
Survey respondents were asked to rate 30 macroeconomic,
strategic and operational risks. Of those, the top 10 risks
identified are as follows:
- Regulatory changes and scrutiny may impact operational
resilience and production and delivery of products and
services
- Economic conditions may significantly restrict growth
opportunities
- Succession challenges and ability to attract and retain top
talent may be more difficult
- Limited operational resilience of legacy IT infrastructure and
digital capabilities may restrict the organization's ability to
compete with "born digital" players
- Resistance to change may restrict organizational agility
- Preparedness to manage cyber threats may be insufficient
- Ensuring privacy/identity management and information
security/system protection may be challenging
- Company culture may not empower timely identification and
escalation of risk issues
- Sustaining customer loyalty and retention may be increasingly
difficult
- Adoption of AI-enabled technologies may require new skills
that are either in short supply or require significant
upskilling/reskilling of existing employees
"Nearly half of the top risks this year are related to culture
and attracting and retaining top talent. This is happening at a
time when organizations need to execute increasingly complex
strategies to navigate the rapidly changing digitally-based
business environment," said Jim
DeLoach, a Protiviti managing director and co-author of the
report. "As the future of work evolves, businesses need to upskill
and reskill existing employees ‑ particularly as digital
innovations, such as artificial intelligence, natural language
processing and robotics become a mainstay in organizations ‑ to
ensure they remain competitive with 'born digital' companies and
are future-proofed for the next decade."
While several of the risks remain consistent with findings from
previous years, including concerns around regulation, cyber
threats, operational resilience, privacy management and information
security, this year's results show an escalation of anxiety related
to overall economic issues across domestic and international
markets – climbing from number 11 last year to the number two risk
concern for 2020.
Dr. Mark Beasley, professor of
Enterprise Risk Management and director of NC State's ERM
Initiative and co-author of the report said, "As expectations of
key stakeholders regarding risk management and oversight remain
high, organizations need to offer greater transparency about the
nature and magnitude of risks undertaken in executing an
organization's corporate strategy. Dynamic forces including board
pressure, volatile markets, intensifying competition, changing
workplace dynamics and shifting customer preferences are leading to
increasing calls for management to design and implement effective
risk management capabilities and response mechanisms, to identify,
assess and manage the organization's key risk exposures."
Given the relative riskiness of the business environment, now
may be the time for boards and C-suites to closely examine how
their organizations approach risk management and oversight in the
digital age to pinpoint aspects requiring significant
improvement. To that end, the Protiviti-NC State report
includes a call to action, offering executives and directors
diagnostic questions to consider when evaluating their own risk
assessment and risk management processes. These diagnostic
questions address five topical areas:
- Assessing impact of leadership and culture on our risk
management process, e.g., is the organization's culture affecting
how employees engage in risk management processes and conversations
and, if so, how do we know?
- Ensuring a sufficiently robust risk management approach, e.g.,
is the risk management process supported by an effective, robust
methodology that is definable, repeatable and understood by key
stakeholders?
- Evaluating whether the risk focus is sufficiently
comprehensive, e.g., to what extent is the company's focus on
external risks linked to geopolitical shifts, emerging disruptive
innovations and changes in macroeconomic factors?
- Clarifying accountabilities for managing risks, e.g., is there
actionable, current risk information that is widely shared to
enable more informed decision-making?
- Communicating an enterprise view of top risks and board risk
oversight, e.g., is there a periodic board-level dialogue regarding
management's appetite for risk-taking and whether the
organization's risk profile is consistent with that risk
appetite?
Resources Available; Webinar on December 18
The
"Executive Perspectives on Top Risks 2020" report from Protiviti
and North Carolina State University
provides respondent details broken out by company size, industry
and geographical region and respondent role. The report, along with
an infographic and a podcast series, are available for
complimentary download from Protiviti here and from NC State here. A complimentary 75-minute webinar
exploring the implications of the survey results will be held on
December 18, 2019 at 1:00 p.m. PST, featuring Protiviti's DeLoach and
EVP Pat Scott with NC State's Dr.
Beasley. Please register for the webinar here.
About the NC State University Poole College of Management's
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).
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. Through its network of
more than 85 offices in over 25 countries, Protiviti and its
independent and locally owned Member Firms provide clients with
consulting solutions in finance, technology, operations, data,
analytics, governance, risk and internal audit.
Named to the 2019 Fortune 100 Best Companies to Work
For® list, Protiviti has served more than 60 percent
of Fortune 1000® and 35 percent
of Fortune Global 500® companies.
The firm also works with smaller, growing companies, including
those looking to go public, as well as with government agencies.
Protiviti is a wholly owned subsidiary of Robert
Half (NYSE: RHI). Founded in 1948, Robert Half is a
member of the S&P 500 index.
Protiviti is not licensed or registered as a public
accounting firm and does not issue opinions on financial statements
or offer attestation services.
Editor's note: Photos and infographics (PDF or JPEG) available
upon request.
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SOURCE Protiviti