A new risk survey from N.C. State University’s Enterprise Risk Management Initiative and Protiviti finds that regulatory changes and heightened regulatory scrutiny are the most worrisome concerns for 2014.
The survey, now in its second year, took responses from 370 executives and board members about the risks that concern them the most. “It’s a message for policymakers,” said Jim DeLoach, CPA, a Protiviti managing director. “The bottom line is, it does have a cost in that it does affect business and it does affect decision-making around hiring and investing.”
The survey also included three key actions necessary for businesses to succeed in the current risk environment including evaluating changes in the businesses climate to ensure one’s strategies and businesses are aligned accordingly. DeLoach also recommends to consistently examine emerging trends in order to recognize options and possible exit strategies from current plans that aren’t proving to be successful.
Although regulatory concerns decreased a bit from the previous year (to 6.4 from 6.8 on a scale of 1 to 10), they were the top concern for four of the six industry groups in the global survey, and especially worrisome for respondents in the financial services and health care sectors.
“There are potentially risks in that second 10 that could become more significant moving forward,” DeLoach said.
According to survey respondents, the top 10 risks that present the greatest concerns this year are:
- Regulatory changes and heightened regulatory scrutiny
- Economic conditions restricting growth
- Uncertainty surrounding political leadership affecting U.S. and international markets
- Challenges related to succession-planning and talent acquisition/retention
- The ability to grow organically through customer acquisition
- Cyber threats that have the potential to disrupt core operations significantly
- Resistance to change restricting necessary adjustments to the business model and core operations
- Privacy/identity management and information security/system protection
- Anticipated volatility in global financial markets and currencies
- Uncertainty surrounding costs of complying with healthcare reform legislation