Events around the world remind organizations that they operate in an increasingly risky world and how important it is to have a grip on risk management
. A newly released survey by consulting firm Protiviti showed that the top concern for senior executives this year is regulatory change and heightened regulatory scrutiny. They surveyed 535 board members and executives across the globe. Below is a summary of the main findings:
Regulatory changes and increased regulatory scrutiny continue to be the top risks among executives in 2016. Many executives are aware of the rapid changes happening in the business world, because over 50 percent reported that “rapid speed of disruptive innovations and new technologies within the industry may outpace their ability to compete and manage the risk appropriately, without making significant changes to our business model.” In the past, this risk area only sparked concern among the technology industry. This year, the health and life sciences industry also placed it at the top of their list.
Respondents were asked to rate the impact of the risks they expect to face over the next 12 months on a 10-point scale. (1 = extremely low, 10 = extensive). For the first time, 51 percent of respondents noted that disruptive innovations and technologies would have a significant impact on their organization. In addition to regulatory changes, organizations were equally concerned with economic conditions in the markets they currently serve. In gauging this risk, executives are aware that the pace of economic growth can shift in any region.
Respondents were asked to provide an overall impression of the magnitude and severity risks their organization will be facing this year on a 10-point scale (1=extremely low, 10 = extensive). The outlook for risks differ between large and small organizations. Larger organizations specified that the magnitude of risks was higher in 2016, while smaller organizations reported a decrease in the severity of risks.
Because of the rapid pace of the global business environment, executives should maintain an active dialogue and discussion with their board members and consult the general counsel if necessary. They should also regularly check in to assess their risks and how to position their organization so that they can respond proactively.