Brexit. Turmoil in the Middle East and the resulting surge in immigration. Changes in national political leadership. Depressed oil prices. Monetary policies and concerns about inflation and inflated asset prices in China. Global terrorism. Escalating healthcare costs. Rapidly developing innovations from the digital technology revolution. Expanding regulation and oversight. A strong U.S. dollar.
These and a host of other significant risk drivers are all contributing to the risk dialogue in boardrooms and executive suites.
Expectations of key stakeholders regarding the need for greater transparency about the nature and magnitude of risks undertaken in executing an organization’s corporate strategy continue to be high. Pressures from boards, volatile markets, intensifying competition, demanding regulatory requirements, fear of catastrophic events and other dynamic forces are leading to increasing calls for management to design and implement effective risk management capabilities to identify and assess the organization’s key risk exposures, with the intent of reducing them to an acceptable level.
This report from Protiviti and North Carolina State University’s ERM Initiative contains results from the fifth annual risk survey of directors and executives to obtain their views on the extent to which a broad collection of risks are likely to affect their organizations over the next year. This survey provides insights across different sizes of companies and across multiple industry groups as to what the key risks are expected to be in 2017 based on the input of the participating executives and board members.
Among this year’s key findings:
- The overall global business context is perceived to be noticeably more risky in 2017.
- Concerns about economic conditions top the list of risk issues for the coming year, followed closely by regulatory changes and scrutiny.
- Cyberthreats, information security and privacy remain critical issues for organizations to address.
The top five risks include:
- Economic conditions in domestic and international markets
- Regulatory change and heightened regulatory scrutiny
- Managing cyberthreats
- Rapid speed of disruptive innovation
- Privacy and identity protection
- Greater magnitude and severity of risks expected in the coming year
- CEOs and CFOs see a riskier environment