Sue Reisinger, Corporate Counsel
March 27, 2016
An annual risk survey of board members and corporate executives shows that the top concern on the minds of execs worldwide is regulatory change and heightened regulatory scrutiny—for the fourth year in a row.
Released Thursday, “Executive Perspectives on Top Risks for 2016” is the work of consulting firm Protiviti and the Enterprise Risk Management (ERM) Initiative at North Carolina State University’s Poole College of Management.
In the survey, 535 board members and top executives around the world and across industries rated the significance of 27 risk issues for the coming year. Although the study focused on directors, CEOs and CFOs, the executives most likely consulted their general counsel on risk factors.
“Interestingly, we found boards of directors, CEOs and other members of the executive team report differing views of the top risk exposures facing their organizations,” said a statement from professor Mark Beasley, director of the ERM Initiative. The board members see the world as less risky, while company executives see the outlook for the next 12 months as more risky, Beasley explains.
“These findings suggest there is a strong need for discussion and dialogue between management and the board to ensure the organization is focused on the right emerging risk exposures,” Beasley adds.
The survey shows that 60 percent of respondents believe regulatory change and more regulator scrutiny will continue to have a significant impact on their organizations.
That was closely followed by concern over changing economic conditions that can restrict growth and by fear of cyberbreaches.
Two new risks made it into the survey’s top 10 this year: The rapid speed of disruptive innovations and/or new technologies within the industry, and the anticipated volatility in global financial markets and currencies.
“Given publicity about data breaches at major retailers, global financial institutions and other high-profile companies, and the growing presence of state-sponsored cyberterrorism, most executives recognize the need for ‘cyber-resiliency,’” the survey states.
Patrick Scott, Protiviti’s executive vice president, said in a statement that the study shows there are high expectations by key stakeholders “regarding the need for greater transparency about the nature and magnitude of organizations’ risks.”
