Over 700 board members and executives across a number of industries participated in the Executive Perspectives on Top Risk for 2017 annual survey, which was was conducted by Protiviti and North Carolina State University’s Enterprise Risk Management Initiative.
Respondents were asked to rate 30 individual risk issues using a 10-point scale, where a score of 1 reflects “No Impact at All” and a score of 10 reflects “Extensive Impact” to their organization over the next year, across these three dimensions:
- Macroeconomic risks likely to affect their organization’s growth opportunities
- Strategic risks the organization faces that may affect the validity of its strategy for pursuing growth opportunities
- Operational risks that might affect key operations of the organization in executing its strategy
The results show that “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.”
Top 10 Risks Identified for 2017, With Scores
Economic conditions in markets we currently serve may significantly restrict growth opportunities for our organization – 6.61
Regulatory changes and regulatory scrutiny may heighten, noticeably affecting the manner in which our products or services will be produced or delivered – 6.51
Our organization may not be sufficiently prepared to manage cyberthreats that have the potential to significantly disrupt core operations and/or damage our brand – 5.91
Rapid speed of disruptive innovations and/or new technologies within the industry may outpace our organization’s ability to compete and/or manage the risk appropriately, without making significant changes to our business model – 5.88
Ensuring privacy/identity management and information security/system protection may require significant resources for us – 5.87
Our organization’s succession challenges and ability to attract and retain top talent may limit our ability to achieve operational targets – 5.76
Anticipated volatility in global financial markets and currencies may create significantly challenging issues for our organization to address – 5.67
Our organization’s culture may not sufficiently encourage the timely identification and escalation of risk issues that have the potential to significantly affect our core operations and achievement of strategic objectives – 5.66
Resistance to change may restrict our organization from making necessary adjustments to the business model and core operations – 5.63
Sustaining customer loyalty and retention may be increasingly difficult due to evolving customer preferences and/or demographic shifts in our existing customer base – 5.62
Risks That Effect Supply Chain, Sourcing, and Supply
Risks that effect supply chain, sourcing and supply, in addition to the ones identified above (economic conditions in markets, regulatory changes, cyberthreats, ensuring privacy, and volatility in global markets), listed by rank:
- Uncertainty surrounding political leadership in national and international markets may limit our growth opportunities – #11
- 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 plan – #13
- Our organization may not be sufficiently prepared to manage an unexpected crisis significantly impacting our reputation – #17
- Risks arising from reliance on outsourcing and strategic sourcing arrangements, technology vendor contracts, and other partnerships and/or joint ventures to achieve operational goals may prevent us from meeting organizational targets or impact our brand image – #19
- Substitute products and services may arise that affect the viability of our current business model and planned strategic initiatives – #21
- Anticipated changes in global trade policies may limit our ability to operate effectively and efficiently in international markets – #22
- Uncertainty surrounding the viability of key suppliers or scarcity of supply may make it difficult to deliver our products or services – #26
- Geopolitical shifts and instability in governmental regimes or expansion of global terrorism may restrict the achievement of our global growth objectives – #29