Executives Identify Top 10 Risks for 2015
Cybersecurity has come to the forefront of risk oversight for board members and C-suite executives, according to the third annual global survey of business executives by Protiviti.
Jointly produced by global consulting firm and the enterprise risk management (ERM) Initiative at the North Carolina State University Poole College of Management, ‘Executive Perspectives on Top Risks for 2015’ summarises the concerns of the 277 board members, C-suite and other top-level executives across industries who participated in the survey
Fifty-three per cent of the global survey respondents indicated that insufficient preparation to manage cyber threats is a risk that will “significantly impact” their organisations this year. Following a string of data breaches in the past year, cyber threats jumped to number three this year, up three rank positions in year-over-year (YoY) survey results, reflecting increased concern about operational and reputational damage associated with potential breaches.
“Our survey findings indicate that operational risk issues are keeping many senior executives up at night,” said Mark Beasley, Deloitte professor of ERM and NC State ERM Initiative director. “Given encouraging signs in the economy, we’ve observed an overall shift in focus from macroeconomic risks to operational risks, which had the greatest increase in risk scores from 2014. Notably, however, CEO respondents remained extremely focused on macro trends affecting their business.”
For the third consecutive year, regulatory changes and heightened regulatory scrutiny was the number one risk on the minds of board members and corporate executives; 67% indicated that it will “significantly impact” their organisations.
The top 10 risks identified in the annual risk survey and the percentages of respondents who identified each risk as having a “significant Impact” on their business were as follows.
The survey findings suggest that while the business environment in 2015 will be somewhat less risky than in the previous two years, most of the business leaders surveyed indicated that they are more likely to invest in additional risk management resources in 2015.
The survey also identified differing perceptions between boards of directors and members of the executive team regarding the current risk environment; chief executives (CEOs) and boards of directors reported more optimism about risk issues while chief financial officers (CFOs) and chief audit executives perceived a more risky business environment.