Executive Perspectives on Top Risks for 2018

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Key Issues Being Discussed in the Boardroom and C-Suite

Technological advancements. Disruptive innovations threatening core business models. Recurring natural disasters with catastrophic impact. Soaring equity markets. Turnover of leadership in key political positions. Potential changes in interest rates. Cyber breaches on a massive scale. Terrorism. Elections in Europe. Threats of nuclear engagement. The world is changing before our eyes, say board members and C-suite executives around the globe. Not long ago, regulatory scrutiny and economic conditions topped their list of risk issues. Today their chief issues include disruptive innovation, digitalization, organizational resistance to change, cyber threats and corporate culture.

Critical concerns abound for board members and C-suite executives, according to the annual Executive Perspectives on Top Risks Survey from North Carolina State University’s ERM Initiative and Protiviti. Expectations of key stakeholders regarding the need for greater transparency about the nature and magnitude of risks undertaken in executing an organization’s corporate strategy continue to be high.

Among the many highlights in this year’s results:

  • Survey respondents indicate that the overall global business context is slightly less risky in 2018 relative to the two prior years, with respondents in all regions of the world sensing a slight reduction in the magnitude and severity of risks on the horizon in 2018 related to 2017.
  • Respondents indicate that they are likely to devote additional time or resources to risk identification and management over the next 12 months.
  • While respondents indicated slightly less concern about the overall magnitude and severity or risks for 2018 relative to the two prior years, there are noticeable shifts in what constitutes the top 10 risks for 2018 relative to last year.

Overall top five risks include:

  1. Rapid speed of disruptive innovation
  2. Resistance to change
  3. Managing cyber threats
  4. Regulatory change and heightened regulatory scrutiny
  5. Culture may not encourage timely escalation of risk issues

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