Since the dawn of this decade, the world has been in a perpetual state of crisis. Whether COVID, geopolitical conflicts, macroeconomic events or other turmoil, risks are emerging, maturing and spawning devastating disruption before we even see them coming. This environment has been particularly challenging for risk managers and internal auditors, upon whose shoulders risk awareness and assurance often ride.
Faced with seemingly insurmountable odds when monitoring risks, we cannot simply throw up our hands in despair. Instead, we must constantly scan the horizon for clues about vulnerabilities that may be lurking.
Fortunately, each year, there are a handful of survey-based research reports that are highly anticipated for those of us who like to peer toward the risk horizon. They offer the perspectives of board members, executives, risk managers, internal auditors and others on issues and trends that are “keeping them awake at night.”
This week, another highly anticipated risk report is being released. The 12th annual Executive Perspectives on Top Risks for 2024 and a Decade Later is a joint undertaking by North Carolina State University’s ERM Initiative and Protiviti.
I have been eagerly awaiting the report, which is based on a survey of more than 1,100 board members and executives worldwide, because of its unique ability to illuminate the risk outlook through the lens of the C-suite and boardroom. Once again, the annual report doesn’t disappoint. It is a must-read resource for internal auditors around the world as you undertake the critical process of assessing the risks facing your enterprises.
The authors offer a number of critical observations:
In summary, the report’s authors note, “The churn in this year’s survey results points to multiple sources of uncertainty, painting a cloudy, interconnected picture of the business landscape.”
Elaborating on the concept of churning risks, the report adds, “Near term, there is continued economic uncertainty causing executives to sharpen their focus on managing external risks (inflation, cyber threats, interest rates, third party exposures, etc.) and increasing organizational resilience. Long term, executives remain on guard for what comes next, as illustrated by the uptick in risks following the recent events in the Middle East.”
Of most immediate concern to the C-suite are risks hurdling their way in the year ahead. According to the survey, the top seven risks for 2024 are:
This is the fourth Top Risks report that also prompts survey respondents for an assessment of risks their organizations could face 10 years out. The top five:
Perhaps the most surprising revelation in this year’s report is that macroeconomics moved even higher on the C-suite’s risk radar. Coming in at a solid second in last year’s report, I assumed macroeconomic risks might recede. However, it moved into first place for the year ahead and remains solidly in the top 10 for the remainder of the decade.
“Near term, uncertainty continues in the market over central bank policies amid persistent inflation being fueled by rising labor costs (driven by robust employment and skilled labor shortages, particularly in countries where birth rates have dropped significantly), outsized government stimulus, the West’s de-risking reliance upon China, regional conflicts, other development in the political landscape, and increasing shelter, food and energy prices,” according to the report.
At more than 160 pages, the Top Risks report is far too comprehensive for me to cover in just this blog. There is insightful analysis in calls to actions on topics such as:
In addition, the report includes valuable insights such as:
The report also contains useful analysis by industry, geographic region and more. The only way to truly appreciate this report is to make it a priority to read it thoroughly.
Congratulations to my friends and colleagues at NC State and Protiviti on another outstanding and timely report on the top risks that lie ahead. I welcome your thoughts on the top risks your organization is facing in 2024. Share your comments on LinkedIn or X (formerly known as Twitter) or drop an email to me at email@example.com.