There are encouraging signs of an improving business climate, as exhibited by lower unemployment rates and a resurgence in consumer confidence, manufacturing and construction activity, among other factors. The global business environment continues to evolve rapidly, creating opportunities and challenges for all types of organizations. Uncertainties linked to U.S. federal spending, the rollout of the Affordable Care Act in the United States, and the effects of technological innovation, expanding regulation and oversight, new competitive forces, and a host of other significant risk drivers are all contributing to the risk dialogue in boardrooms and executive offices. Organizations in virtually every industry and country are reminded, all too frequently, that they operate in a risky world.
In this report, we review the top risks on the minds of global boards of directors and executives for 2014 from the findings of Protiviti and North Carolina State University’s Enterprise Risk Management (ERM) Initiative. Our respondent group of more than 374 board members and C-suite executives, provided their perspectives about the potential impact in 2014 of 22 specific risks across these three dimensions: Macroeconomic risks; Strategic risks; Operational risks.
Changes in the regulatory environment and heightened scrutiny by regulators rank at or near the top of risk concerns among corporate leaders, regardless of industry, according to this study. Most executives rated the business environment as risky, although improving relative to 2013. The 2014 scores for a majority of risks assessed in the study are lower than their respective scores in the prior year, suggesting a slight improvement in the risk environment. Interestingly, board members appear to view the business environment as more risky than does management. By contrast, CEOs seem to have the most optimistic views about the risk environment.