MENLO PARK, Calif.,
Dec. 7, 2017 /PRNewswire/ -- The
rapid pace of technological developments and disruptive
innovations, along with organizational resistance to change, are
the top concerns for boards of directors and business leaders
around the world heading into 2018, according to the results of the
sixth annual Executive Perspectives on Top Risks Survey conducted
by global consulting firm Protiviti and the Enterprise Risk
Management (ERM) Initiative in the North
Carolina State University Poole College of Management.
Released today, the survey report, "Executive Perspectives on
Top Risks for 2018," assesses the concerns of 728 board members and
executives globally. The results indicate that growing concerns
around disruptive innovation significantly outpace fears of
economic uncertainty and regulatory scrutiny, which have
consistently been the top risk issues of board members and
executives over the past several years. Threats related to
cybersecurity are a top risk area for business leaders as well,
particularly in light of recent cyberattacks such as WannaCry,
along with those affecting major organizations like Equifax. Of
particular note, board members across all industries perceive a
much riskier environment in 2018 relative to 2017.
"Disruption and digital transformation are taking place across
all industries and threatening core business models," said
Pat Scott, an executive vice
president with Protiviti. "It's clear from our latest survey that
there has been a major shift in the top concerns for organizations.
Digitalization-related risks have supplanted overall economic
conditions and regulatory scrutiny atop the list of risk issues for
board members and executives who are worried that new technologies
and their impact on established business models could outpace their
organizations' ability to keep up and remain competitive."
"It's no longer a question of if digital will upend your
business, but when," said Jim
DeLoach, a Protiviti managing director. "While a number of
organizations already have digital strategies in place, digital
transformation needs to become entrenched as a core part of the
organization to ensure that companies are able to embrace
disruptive change in the current business environment. This risk
plus heightened concerns regarding resistance to change create a
formidable challenge to executives and directors. Leaders know that
failure to keep up with the rapid pace of change can place an
organization in the position of becoming captive to events rather
than charting its own course."
The Top 10 Risks for 2018
Following are the top
10 risks identified in the "Executive Perspectives on Top Risks for
2018" report:
- Rapid speed of disruptive innovations and/or new technologies
may outpace our organization's ability to compete and/or manage the
risk appropriately, without making significant changes to our
business model.
- Resistance to change may restrict our organization from making
necessary adjustments to the business model and core
operations.
- Our organization may not be sufficiently prepared to manage
cyber threats.
- Regulatory changes and regulatory scrutiny may heighten.
- Our organization's culture may not sufficiently encourage the
timely identification and escalation of risk issues.
- Our organization's succession challenges and ability to attract
and retain top talent may limit our ability to achieve operational
targets.
- Ensuring privacy/identity management and information
security/system protection may require significant resources for
us.
- Economic conditions in the markets we currently serve may
significantly restrict growth opportunities.
- 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 existing operations 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" and with a low cost base for their
operations.
From an industry perspective, the financial services and energy
and utilities industry groups saw the largest decrease in overall
risk concerns compared to 2017. This is likely due to reduced
concerns about macroeconomic risks and regulatory change, as
reflected in the survey findings. The technology, media and
communications industry group expressed the highest concern
regarding the magnitude and severity of risks overall.
"In light of the shifting risk landscape, it's particularly
interesting to observe an increasing concern among survey
respondents that their organization's culture may not sufficiently
encourage the timely identification and escalation of risk issues
to senior management and the board," said Dr. Mark Beasley, Deloitte Professor of Enterprise
Risk Management and director of NC
State's ERM Initiative. "As boards of directors and senior
executives seek to improve their understanding of emerging risk
issues, they may need to re-evaluate how their organization's
culture might be impacting the robustness and transparency of their
risk identification and risk reporting efforts," added Beasley.
The Executive Perspectives on Top Risks for 2018 survey was
conducted in the fall of 2017, and respondents represent both
U.S.-based and non-U.S.-based organizations across public and
private sectors. The survey report also provides detailed insights
broken out by size and type of company, respondent role and
industry.
Resources Available to Learn More; Webinar on December 14
The "Executive Perspectives
on Top Risks for 2018" report from Protiviti and North Carolina State University, along with an
infographic, video and podcast highlighting the survey results, are
available for complimentary download at erm.ncsu.edu/toprisksreport
and www.protiviti.com/toprisks. The first in a series of
complimentary 60-minute webinars exploring the implications of the
survey results will be held on December
14 at 10 a.m. PST, featuring
NC State's Dr. Beasley and Protiviti's
Jim DeLoach and Pat Scott.
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 70 offices in over 20 countries, Protiviti and its
independently owned Member Firms provide clients with consulting
solutions in finance, technology, operations, data, analytics,
governance, risk and internal audit.
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.
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).
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: infographic of survey highlights available in PDF
or JPEG formats. Photos available upon request.
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SOURCE Protiviti