MENLO PARK, Calif.,
Feb. 3, 2021 /PRNewswire/ -- Board
members and C-suite executives around the globe are most concerned
in 2021 with risks associated with COVID-19-related government
policies and regulations, economic conditions that may restrict
growth and market conditions that may continue to impact customer
demand, according to a new survey from Protiviti and North Carolina State University. Amid these
near-term headwinds, when asked about top concerns through 2030,
business leaders cite challenges that ultimately ladder up to
talent. High ranking risks – including the adoption of technology
that requires new or upgraded skills, rapid innovation that
threatens business models and the reimagining of creative
strategies – point to a need to attract and retain top talent and
invest in reskilling and upskilling workforces to ensure agility
and resilience in the future.
More than ever, 2020 demonstrated that organizations can no longer
afford a reactive approach to risk management.
The annual survey, this year titled "Executive Perspectives on
Top Risks for 2021 and 2030," was conducted by global consulting
firm Protiviti and North Carolina State
University Poole College of Management's Enterprise Risk
Management (ERM) Initiative. In its ninth year, the survey was
conducted following the November 3
U.S. elections to reduce the influence that an uncertain outcome
could potentially have on survey results. The study surveyed over
1,000 (1,081) board members and C-suite executives from
organizations in a variety of industries and in all regions around
the globe.
The Top 10 Risks for 2021
Survey respondents were asked to rate 36 macroeconomic, strategic
and operational risks, including new risks that emerged this year
related to the COVID-19 pandemic and social justice. The top 10
risks identified for 2021 are as follows:
- Pandemic-related policies and regulation impact business
performance
- Economic conditions constrain growth opportunities
- Pandemic-related market conditions reduce customer
demand
- Adoption of digital technologies require new skills or
significant efforts to upskill/reskill existing employees
- Privacy/identity management and information security
- Cyber threats
- Impact of regulatory change and scrutiny on operational
resilience, products and services
- Succession challenges, ability to attract and retain top
talent
- Resistance to change operations and business model
- Ability to compete with "born digital" and other
competitors
"More than ever, 2020 demonstrated that organizations can no
longer afford a reactive approach to risk management. Pandemic risk
loomed on the horizon for a long time – it was a matter of 'when,'
not 'if,'" said Jim DeLoach, a
Protiviti managing director and co-author of the report. "Business
leaders must be vigilant in scanning for emerging issues and make
actionable plans to adjust their strategies and business models
while being authentic in fostering a trust-based, innovative
culture and the organizational resilience necessary to successfully
navigate disruptive change. Digitally mature companies with an
agile workforce were ready when COVID-19 hit and are the ones best
positioned to continue to ride the wave of rapid acceleration of
digitally driven change through the pandemic and beyond."
Consistent with the survey's findings in previous years, data
security and cyber threats again rank in the top 10 risks for both
2021 and 2030. The continuously evolving nature of cyber and
privacy risks underscores the need for a secure operating
environment in which nimble workforces can regularly refresh the
technology and skills in their arsenal to remain competitive.
"If there's any risk that all organizations across industries
and geographies must maintain focus on, it's cybersecurity and
privacy," said Patrick Scott,
executive vice president, Industry Programs, Protiviti. "While the
areas that businesses will need to address may change as they
transform their business models and increase their resiliency to
face the future confidently, cybersecurity and privacy threats will
remain a constant and should be at or near the top of the list.
These threats have been top risks for quite some time, and they
aren't going away."
The Top Risks for 2030
New for this year's survey,
respondents also rated the expected impact of the same 36 risks on
their organizations in 2030. The risk landscape of 2030 presents a
markedly different picture, according to survey respondents who
identified the following as the top 10 risks for 2030:
- Adoption of digital technologies may require new skills or
significant efforts to upskill/reskill existing employees
- Impact of regulatory change and scrutiny on operational
resilience, products and services
- Rapid speed of disruptive innovation outpace our ability to
compete
- Succession challenges, ability to attract and retain top
talent
- Privacy/identity management and information security
- Substitute products or services arise that affect our business
model
- Sustaining customer loyalty and retention become more difficult
as customer preferences and demographic shifts evolve
- Ability to compete with "born digital" and other
competitors
- Inability to utilize data analytics and "big data" to achieve
market intelligence and increase productivity and efficiency
- Cyber threats
Taking a decade-long view of the risk horizon, executives are
concerned about the future of work, particularly when it comes to
their organization's ability to adapt to emerging digital
technologies and keep pace with the rapid speed of disruptive
innovation. According to the survey results, an organization's
ability to upskill and reskill employees as well as attract and
retain top talent will be paramount to its risk management strategy
in the decade ahead.
Dr. Mark Beasley, professor of
Enterprise Risk Management and director of NC
State's ERM Initiative and co-author of the report
said, "Following a year of unprecedented adoption of digital
tools across industries globally, businesses are facing heightened
pressure to pivot to new skills, processes, products and services
to meet evolving customer preferences, protect their brand value
and remain competitive in an increasingly complex and automated
world. One of the most important lessons that business leaders need
to take away from 2020 is that they must prepare for a disruptive
future by positioning their organizations to adapt and evolve with
the speed of change."
The study's report also includes a call to action, offering
executives and directors diagnostic questions to consider when
evaluating risk assessment and risk management processes.
Resources Available
The "Executive Perspectives on Top
Risks for 2021 and 2030" report from Protiviti and North Carolina State University provides respondent
details broken out by company type, size, industry, geographic
region and respondent role. The report, along with an infographic
and a podcast about the survey results, is available for
complimentary download here. Protiviti will host a one-hour webinar
with a panel including Beasley, Bozzella, DeLoach, Scott and
Manisha Shah, a Protiviti managing
director and leader of the privacy practice, to discuss the
implications of the survey's findings on February 24, 2021 at 11:00
a.m. PST. Attendance is free with registration
here.
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, analytics, governance, risk and internal audit
through its network of more than 85 offices in over 25
countries.
Named to the 2020 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.
About the ERM Initiative
The ERM Initiative
(www.erm.ncsu.edu) in the Poole College of Management at
North Carolina State University
provides thought leadership to help executives and boards
strengthen their oversight of enterprise-wide risks as they develop
and implement strategies for growth. The ERM Initiative's website
hosts over 600 articles, thought papers, and best practices
documents to help business leaders navigate today's uncertainties
for tomorrow's strategic success.
Protiviti is not licensed or registered as a public
accounting firm and does not issue opinions on financial statements
or offer attestation services.
Editors' note: photos and infographic available upon
request.
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