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1、Research Conducted by NC State Universitys ERM Initiative and ProtivitiKey issues being discussed in the boardroom and C-suiteEXECUTIVE PERSPECTIVES ON TOP RISKSfor 2024 and a Decade LaterContents04Key highlights from this study45Longer-term perspective overview of risks for 203426Highlights of key

2、differences across subsets of respondents12Major takeaways about emerging risks07Methodology20A series of calls to action34The top risk concerns for 2024129 Analysis across geographic regions54Analysis across different sizes of organizations155 Evaluating an organizations approachto risk oversight62

3、Analysis across executive positions represented147 Responses to open-ended questions on major2024 concerns140 Analysis across public and non-public entities160 Research team and authors87Analysis across industry groups149 Plans to deploy resources to enhance riskmanagement capabilities39Three-year c

4、omparison of |Executive Perspectives on Top Risks for 2024 and a Decade Later|Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduProtiviti and NC State Universitys ERM Initiative are pleased to provide our 12th annual report focusing on the top risks currently on the minds o

5、f 1,143 directors and senior executives around the globe.This report reflects their views on the extent to which a broad collection of risks is likely to affect their organizations over the next year 2024 and a decade later 2034.The top 10 risk lists for the next 12 months(2024)and 10 years out(2034

6、)The table to the right summarizes the top 10 risks for 2024 and 2034.As indicated by the red arrows,three of the top 10 risks for 2024 are rated higher than they were for 2023,and nine of the 2034 risks are higher than last years survey that also looked out a decade.Eight of the top 10 risks for 20

7、24 as well as eight top risks looking out a decade(2034)were also long-term risks in last years survey,suggesting these risks may have a persistent long-term impact.Top risks for 20241.Economic conditions,including inflationary pressures2.Ability to attract,develop and retain top talent,manage shift

8、s in labor expectations,and address succession challenges3.Cyber threats4.Third-party risks5.Heightened regulatory changes and scrutiny6.Adoption of digital technologies requiring new skills in short supply7.Existing operations and legacy IT infrastructure unable to meet performance expectations as

9、well as“born digital”competitors8.Change in current interest rate environment9.Increases in labor costs10.Ensuring privacy and compliance with growing identity protection expectationsTop risks for 20341.Cyber threats2.Ability to attract,develop and retain top talent,manage shifts in labor expectatio

10、ns,and address succession challenges3.Adoption of digital technologies requiring new skills in short supply4.Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces5.Heightened regulatory changes and scrutiny6.Third-party risks7.Economic conditions,i

11、ncluding inflationary pressures8.Existing operations and legacy IT infrastructure unable to meet performance expectations as well as“born digital”competitors9.Increases in labor costs10.Inability to utilize rigorous data analytics to achieve market intelligence and increase productivity and |Executi

12、ve Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduKey highlights from this studyMajor themes for 2024 and 2034 Multiple sources of uncertainty create potential for a wide range of near-term horizon risks.The shift in top risks from last year reveals a global business environment e

13、xperiencing significant change,with many new risk concerns for 2024 relative to last year.Recent geopolitical developments are changing the risk landscape.Prior to the October 7,2023,developments in the Middle East,no risks were rated at the“Significant Impact”level for 2024;however,after the attack

14、s,many risks increased,with four rated at the“Significant Impact”level.Economic concerns zoom to the top risk position near-term.Economic conditions,particularly inflationary pressures,replaced the ability to attract,develop and retain top talent,manage shifts in labor expectations,and address succe

15、ssion challenges as the number one risk globally for 2024.Myriad technology-related challenges include escalated cybersecurity risks,continued data privacy concerns linked to increased third-party reliance,the need to upskill employees to realize fully the value proposition of emerging technologies,

16、and the limitations of legacy infrastructure.These technology-linked risks are interrelated and need to be considered collectively by executives and the board,as exposures triggered by one risk may lead to increased exposure to other risks.Cybersecurity represents an ongoing challenge for both the n

17、ear-term and long-term.Challenges related to cyber threats are increasingly on the minds of global executives,moving from the 15th-ranked risk last year to the third-ranked risk for 2024 and the top risk for 2034,up from 15th in last years long-term horizon assessment.The increasing use of technolog

18、y to drive innovation and efficiencies and increased reliance on third parties create more opportunities for cyber vulnerabilities to be exposed,particularly to nation-state and other threat actors determined to exploit these opportunities for geopolitical advantages and financial gain.Legacy IT sys

19、tems and existing operations may make it difficult for incumbents to compete with nimbler“born digital”competitors.Not only do outdated systems create competitive limitations,but they also present unintended exposures that may lead to cybersecurity and data privacy concerns.Executives reveal this as

20、 both a short-term and long-term top 10 risk concern.Coupled with cyber threat concerns,executives are also focused on the challenge of addressing proliferating identity protection expectations.As regulations proliferate and overall public expectations surrounding the protection of sensitive,private

21、 data evolve,business leaders are concerned about their organizations ability to protect the information they collect,process,store and manage from unintentional exposure.People-related risks intertwine the top near-term and long-term risks.Talent-related issues dominated the top risks in the prior

22、years survey,and executives continue to focus on risks related to finding and retaining the right kind of talent for their organizations strategic success.Overarching concerns about attracting,developing and retaining top talent,including succession challenges,remain near the top of all risk issues(

23、as the number two risk for 2024),with that concern continuing for the long term(it remains as the number two risk for 2034).Relatedly,executives are particularly focused on challenges associated with attracting unique kinds |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.ed

24、uof talent and upskilling existing employees,which will allow their organizations to embrace emerging digital technologies,with that particular concern making the top 10 list of risks for both 2024 and 2034.Given this race for talent,executives continue to note that increases in labor costs will be

25、a challenge now and a decade later.Third-party risks rise in importance.Challenges related to existing core operations and legacy IT systems,competitive pressures,pursuits to achieve greater efficiencies,and difficulties in attracting talent may be motivating organizations to increase the use of joi

26、nt ventures,alliances and various kinds of third-party relationships to manage a number of processes.With greater reliance on third parties to perform critical business services,executives are increasingly focused on new risks that may emerge in light of these external partnerships.Among all 36 risk

27、s considered by executives in this years survey,risks linked to third parties increased the most from the prior year,moving from the 17th position last year to the 4th position for 2024.It also made the top 10 list of risks for a decade out.Regulatory changes and scrutiny are heightened for the near

28、-term and a decade out.The potential for expansion in rules and regulatory oversight is creating increased concerns not only for 2024,but also 2034 given it represents a top five risk for both the near-term and long-term horizons.Specific regulatory risks vary by industry.For example,recently propos

29、ed laws and regulations in financial services may increase capital and liquidity requirements and compliance costs,resulting in reduced returns.Technology companies face increasing regulatory oversight on a number of fronts.Such concerns are pervasive across other industries,as worries about expandi

30、ng government regulations and agency enforcement particularly related to data privacy,climate disclosures,sustainability reporting,cyber breach disclosures,expanded attestation requirements and other matters are higher than reported in last years survey for both the coming year and a decade out.Look

31、ing out a decade highlights how many short-term risks are likely to have a lingering impact over the next 10 years.Eight of the top 10 risks for 2024 are top 10 risk concerns in 2034,although there are shifts in relative importance within the top 10.This signals the importance of thinking robustly a

32、bout responses to these risks,given their relative importance for both short-term and long-term performance.Furthermore,eight of the top 10 risks looking out 10 years in last years survey remain on the top 10 list for 2034.Interestingly,respondents signal a heightened overall risk concern as they lo

33、ok out a decade,given they rated nine of the top 10 risks higher for 2034 than they did when looking out a decade in last years survey.The persistence of these risks,continued occurrence of unexpected events and the specter of intensifying geopolitical tensions create a nuanced view of the future.On

34、 the geopolitical front,for example,Russias aggression in Ukraine,the war in the Middle East,the declining trust in American institutions,the proliferation of disinformation and propaganda,and the convergence of China,Russia,Iran and North Korea in opposition to Western democracies provide a combust

35、ible mix that is likely impacting leaders assessment of the long-term global risk landscape.Disruptive innovations and the inability to utilize rigorous data analytics are creating significant pause for executives as they think about their organizations long-term competitive positioning.Continued ad

36、vances in artificial intelligence(AI)and other technologies are driving a wave of disruption that will impact business models,sweep away obsolete strategies and alter customer experiences.Navigating the rapid pace of these digital innovations and finding ways to leverage insights from the volumes of

37、 data organizations must evaluate are particularly concerning to executives as they think about their organizations a decade from now.Those technology and innovation concerns cannot be separated from other risk concerns making the top 10 for 2034 related to shortages of talent to manage the adoption

38、 of digital technologies,the dependence on legacy IT systems,and overarching cyber and privacy concerns.Once again,these interconnected risks cannot be viewed in |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduThe interrelated nature of the risks comprising the top 10 fo

39、r both the near-term and a decade later highlight the importance of managing risks from a portfolio,enterprisewide perspective.Evaluating risks individually may overlook the reality that a single risk event may be sourced across multiple risk concerns.Robust conversations about assumptions related t

40、o the organizations future,overlapping root causes across different risks and dependences on single responses to manage multiple risks can benefit executives and boards with insights about how a given risk may interact with others to impact an organizations strategic success and long-term |Executive

41、 Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edu6MethodologyWe are pleased with the global reach of our 12th annual survey,with strong participation from 1,143 respondents across a variety of industries.Our survey captures insights from C-suite executives and directors,43%of whom

42、represent companies based in North America,16%in Europe,11%in Asia,9%in Latin America,and 8%in Australia/New Zealand,with the remaining 13%from India,Africa and the Middle East.Our survey was conducted online in September and October of 2023 to capture perspectives on risks on the minds of executive

43、s as they peered into 2024 and a decade later(2034).Each respondent was asked to rate 36 individual risk issues across three dimensions.Macroeconomic risks likely to affect their organizations growth opportunities Strategic risks the organization faces that may affect the validity of its strategy fo

44、r pursuing growth opportunities Operational risks that might affect key operations of the organization in executing its strategyTable 1 lists the 36 risk issues rated by our respondents.Each risk was rated in terms of its relative impact using a 10-point scale,where a score of 1 reflects“No Impact a

45、t All”and a score of 10 reflects“Extensive Impact”to their organization over the next year.We also asked them to consider how each of these risks was likely to affect their organization 10 years in the future(i.e.,in 2034).For each of the 36 risk issues,we computed the average score reported by all

46、respondents.Using mean scores across respondents,we rank-ordered risks from highest to lowest impact.This approach enabled us to compare mean scores across the past three years to highlight changes in the perceived level of risk.Consistent with our prior studies,we grouped all the risks based on the

47、ir average scores into one of three classifications:Risks with an average score of 6.0 or higher are classified as having a“Significant Impact”over the next 12 months(2024)/over the next decade(2034).Risks with an average score of 4.51 through 5.99 are classified as having a“Potential Impact”over th

48、e next 12 months(2024)/over the next decade(2034).Risks with an average score of 4.50 or lower are classified as having a“Less Significant Impact”over the next 12 months(2024)/over the next decade(2034).We refer to these risk classifications throughout our report as we provide high-level insights fr

49、om taking a portfolio view of both the short-term and long-term risk issues.We follow that with detailed sub-analyses across a variety of dimensions.We begin with an overview of overarching risk insights based on a collective analysis of both short-term and long-term risk findings from our survey.Fo

50、llowing that overview,we highlight several calls for action that executives may want to consider as they evaluate the effectiveness of their organizations risk governance processes in light of the key findings.In addition to the global,overarching insights,we also review results for various subgroup

51、s(i.e.,company size,position held by respondent,industry representation,geographic location and organization type).With respect to the various industries,we grouped related industry sectors into combined industry groupings to facilitate analysis,consistent with our prior years reports.We conclude th

52、is report with a discussion of plans among organizations to improve their capabilities for managing risks and end with diagnostic questions executives and directors may find helpful to consider when evaluating risk assessment and risk management |Executive Perspectives on Top Risks for 2024 and a De

53、cade Later|erm.ncsu.eduTABLE 1List of 36 risk issues analyzedMacroeconomic Risk Issues Increases in labor costs Anticipated increases in labor costs may affect our opportunity to meet profitability targets Volatility in global financial markets and currency exchange rates Anticipated volatility in g

54、lobal financial markets and currency exchange rates may create significantly challenging issues for our organization to address Changes in global markets and trade policies Evolving changes in assumptions underlying globalization and in global trade policies,escalating tariffs,border restrictions,ta

55、rgeted embargoes,shifts to multilateralism and emergence of regional trading alliances may affect our ability to operate and source effectively and efficiently in international markets Access to capital/liquidity Our ability to access sufficient capital/liquidity may restrict growth opportunities fo

56、r our organization Economic conditions,including inflationary pressures Economic conditions(including inflationary pressures)in markets we currently serve may significantly restrict growth opportunities,impact margins or require new skill sets for our organization Adoption of digital technologies re

57、quiring new skills in short supply The adoption of digital technologies(e.g.,artificial intelligence,automation in all of its forms,natural language processing,visual recognition software,augmented/virtual reality simulations and the metaverse)in the marketplace and in our organization may require c

58、ross-functional skills in Agile,Lean and design that are in short supply in the market as well as significant efforts to upskill and reskill existing employees to fully utilize the new capabilities Geopolitical shifts,regional conflicts and instability in governmental regimes or expansion of global

59、terrorism Political uncertainty surrounding the influence and continued tenure of key global leaders,geopolitical shifts,regional conflicts,and instability in governmental regimes or expansion of global terrorism may restrict the achievement of our global growth and profitability objectives Change i

60、n current interest rate environment The current interest rate environment may have a significant effect on the organizations capital costs and operations Pandemic-related government policies and regulation Government policies surrounding public health practices(in response to a pandemic)and stimulus

61、 to drive recovery and national resilience may significantly impact the performance of our business Impact of social issues and DEI priorities on ability to attract/retain talent and compete Shifts in perspectives and expectations about social issues and priorities surrounding diversity,equity and i

62、nclusion(e.g.,board composition,representation in the C-suite and leadership ranks,and onboarding policies)are occurring faster than the pace at which our organization is motivated and able to manage effectively,which may significantly impact our ability to attract/retain talent and compete in the |

63、Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduStrategic Risk Issues Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces Rapid speed of disruptive innovations enabled by advanced technologies(e.g.,artificial intellige

64、nce,including advancements such as generative AI;automation in all of its forms;hyper-scalable platforms;faster data transmission;quantum computing;blockchain;digital currencies;and the metaverse)and/or other market forces may outpace our organizations ability to compete and/or operate successfully

65、without making significant changes to our business model Social media developments and platform technology innovations Rapidly expanding developments in social media,including the spread of misinformation and disinformation,and platform technology innovations may significantly impact how we do busin

66、ess,interact with our customers,ensure regulatory compliance and/or manage our brand Heightened regulatory changes and scrutiny Regulatory changes and scrutiny may heighten,noticeably affecting the way our processes are designed and our products or services are produced or delivered Growing focus on

67、 climate change and other sustainability policies,regulations,and expanding disclosure requirements as well as expectations of key stakeholders Growing focus on climate change and other sustainability issues and related ESG policies,regulations and expanding disclosure requirements,as well as expect

68、ations and emerging regulations of governments,current and potential employees,and other stakeholders about“green”initiatives,supply chain transparency,fairness in reward systems,and other governance and sustainability issues,may require us to significantly alter our strategy and business model in w

69、ays that may be difficult for us to implement as timely as the actions of our competitors Ease of entrance of new competitors or other changes in competitive environment Ease of entrance of new competitors into the industry and marketplace or other significant changes in the competitive environment(

70、such as major market concentrations due to M&A activity)may threaten our market share Organization not sufficiently resilient and/or agile to manage an unexpected crisis Our organization may not be sufficiently resilient and/or agile to manage an unexpected crisis(including a catastrophic event)sign

71、ificantly impacting our operations or reputation Difficulty in growing through acquisitions,joint ventures and other activities Growth opportunities through acquisitions,joint ventures and other partnership activities may be difficult to identify and implement Limited opportunities for organic growt

72、h Opportunities for organic growth through customer acquisition and/or enhancement may be significantly limited for our organization Substitute products and services that affect the viability of our business Substitute products and services may arise from competitors that enhance the customer experi

73、ence and affect the viability of our current business model and planned strategic initiatives Sustaining customer loyalty and retention Sustaining customer loyalty and retention may be increasingly difficult due to evolving customer preferences for different products,services and buying experiences

74、and/or demographic shifts in our existing customer base Performance shortfalls that trigger activist shareholders Performance shortfalls(including lack of progress on ESG goals/expectations)may trigger activist shareholders who seek significant changes to our organizations strategic plan and vision

75、Formulating business response to legal,political and social issues that are polarizing Our organization may not be prepared to formulate and communicate effectively its response to legal,political and social issues and other related market developments that are polarizing to key stakeholders*This ri

76、sk is new to the 2024 |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduOperational Risk Issues Challenges in sustaining culture due to changes in overall work environment Changes in the overall work environment,including shifts to hybrid environments,expansion of digital

77、labor(e.g.,through the impact of generative AI),changes in the nature of work and who does that work,and M&A activities,may lead to challenges to sustaining our organizations culture and business model*Uncertainty surrounding core supply chain ecosystem Uncertainty surrounding our organizations core

78、 supply chain including the viability of key suppliers,scarcity of supplies,reshoring/offshoring/friend-shoring initiatives,energy sources,unpredictable shipping and distribution logistical issues,or lack of price stability in the supply chain ecosystem may make it difficult to deliver our products

79、or services at acceptable margins Third-party risks Third-party risks arising from our reliance on outsourcing and strategic sourcing arrangements,ecosystem partners,IT vendor contracts,and other partnerships/joint ventures to achieve operational and go-to-market objectives may prevent us from meeti

80、ng organizational targets or impact our brand image Ability to attract,develop and retain top talent,manage shifts in labor expectations,and address succession challenges Our organizations ability to attract,develop and retain top talent,navigate evolving labor expectations and demands(including gen

81、erational distinctions),and address succession challenges amid the constraints of a tightening talent/labor market may limit our ability to achieve operational targets Cyber threats Our organization may not be sufficiently prepared to manage cyber threats such as ransomware and other attacks that ha

82、ve the potential to significantly disrupt core operations and/or damage our brand Enhanced exposure to fraud in the industry Incidents of fraud are increasing in our industry,which may lead to increased costs and damage to our reputation*Ensuring privacy and compliance with growing identity protecti

83、on expectations Ensuring data privacy and compliance with growing identity protection expectations and regulations may require alterations demanding significant resources to restructure how we collect,store,share and use data to run our business Existing operations and legacy IT infrastructure unabl

84、e to meet performance expectations as well as“born digital”competitors Our existing operating processes,in-house talent,legacy IT infrastructure,lack of digital expertise and/or insufficient digital knowledge and proficiency in the C-suite and boardroom may result in failure to meet performance expe

85、ctations related to quality,time to market,cost and innovation as well as our competitors,including those that are either“born digital”or investing heavily to leverage technology for competitive advantage Inability to utilize rigorous data analytics to achieve market intelligence and increase produc

86、tivity and efficiency Inability to utilize advanced data analytics and“big data”to achieve market intelligence,gain insights on the customer experience,and increase productivity and efficiency may significantly affect our management of core operations and strategic plans Resistance to change restric

87、ting organization from adjusting business model and core operations Resistance to change in our culture may restrict our organization from making necessary adjustments to the business model and core operations on a timely basis*This risk is new to the 2024 survey.*This risk was new to the 2023 surve

88、y.*This risk was new to the 2022 |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edu*This risk is new to the 2024 survey.*This risk was new to the 2023 survey.Operational Risk Issues(continued)Organizations culture not sufficiently encouraging timely identification and esca

89、lation of emerging risk issues Our organizations culture may not sufficiently encourage the timely identification and escalation of emerging risk issues and market opportunities that have the potential to significantly affect our core operations and achievement of strategic objectives Meeting expect

90、ations around protecting health and safety of employees(including their well-being and mental health),customers,suppliers and our communities Our ability to meet expectations around protecting the health and safety of employees(including their well-being and mental health),customers,suppliers and th

91、e communities in which we operate may be insufficient to receive market permission to operate or encourage people to work for us or do business with us and to do so in a safe environment Managing demands on or expectations of workforce to work remotely or as part of a hybrid work environment Our app

92、roach to managing ongoing demands on or expectations of a significant portion of our workforce to“work remotely”or increased expectations for a transformed,collaborative hybrid work environment and distributed workforce may negatively impact our ability to retain talent as well as the effectiveness

93、and efficiency of how we operate our business Rising threat of catastrophic natural disasters and weather phenomena The rising threat associated with catastrophic natural disasters and weather phenomena(e.g.,wildfires,floods,extreme heat/cold,cyclones/hurricanes/typhoons)may create significant opera

94、tional challenges that threaten our assets and employees as well as our ability to deliver products and services to customers*|Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduMajor takeaways about emerging risksWhat you need to knowThe big picture:The churn in this years

95、survey results points to multiple sources of uncertainty,painting a cloudy,interconnected picture of the business landscape.Near term,there is continued economic uncertainty causing executives to sharpen their focus on managing external risks(inflation,cyber threats,interest rates,third-party exposu

96、res,etc.)and increasing organizational resilience.Long term,executives remain on guard for what comes next as illustrated by the uptick in risks following recent events in the Middle East.A key point:Geopolitical events are driving notable changes in global risk perceptions.Cyber threats,third-party

97、 risks,economic conditions,and the ability to attract and retain talent are among many other risk issues exhibiting a significant ratings jump post October 7 in our survey.Clearly,events in the Middle East are elevating long-term concerns.Economic conditions,including inflation,represent the top ris

98、k issue for 2024.Uncertainty continues in the market over central bank policies amid persistent inflation being fueled by rising labor costs(driven by skilled labor shortages),outsized government stimulus,the Wests de-risking reliance upon China,regional conflicts,and other developments in the geopo

99、litical landscape.Underlying the uneasiness about the economy are concerns around the current interest rate environment significantly affecting the organizations capital costs and operations.Cybersecurity is the most pressing risk issue when combining near-and long-term views.Elevated cybersecurity

100、concerns reflect growing recognition of a complex cyber risk landscape that is impacted by the exponential curve of technological advances,increasing reliance on third parties and other market forces.Ensuring compliance with growing identity protection expectations made the top 10 for 2024 as well,d

101、emonstrating the interrelated nature of cybersecurity and privacy risks.Data privacy and“big data”remain key areas of focus.Organizations successful in deploying forward-looking lead indicators and integrated analytics are likely to be more anticipatory and less reactive than those that arent.People

102、-related risks also remain top of mind.Finding and keeping talent remains a major concern,even amid an uneven economy searching for a soft landing.Initiatives to embrace new technologies necessitate the need to reskill and upskill employees,presenting a challenge both now and in the future;so do ris

103、ing labor costs.Third-party risks rise in importance.This is likely due to increasing reliance on outsourcing and strategic sourcing arrangements,ecosystem partners,IT vendor contracts,and other partnerships and joint ventures to achieve operational and go-to-market objectives.Cyber threats and regu

104、latory compliance risks also come into play.Regulatory changes and scrutiny loom both near-and long-term.As continued economic uncertainty increases the likelihood governments and various agencies will interfere with market functions through regulatory overreach and even excess,there is uncertainty

105、over the likelihood and magnitude of industry-specific and pervasive changes in the regulatory landscape.Climate change and sustainability risks have elevated and are rated as a top five risk by respondents from Europe and the Middle E|Executive Perspectives on Top Risks for 2024 and a Decade Later|

106、erm.ncsu.eduThe combined analysis of risk insights from global executives for both 2024 and a decade out reveals several interrelated challenges that may result in significant events with the potential to test an organizations business agility and resilience.Changes in the profile of top risks from

107、the prior year disclose a number of shifting conditions that may disrupt markets,including events triggered by intensifying geopolitical conditions.Many of those events are expected to have long-lasting impacts on business models and the competitive balance in a nuanced global marketplace.Board memb

108、ers and C-suite leaders who recognize these shifting realities and address them through robust,enterprisewide risk analyses that are aligned with business strategy possess a differentiating skill that positions their organizations readiness and ability to adjust and pivot in the face of inevitable d

109、isruptive change as well as or better than their competitors.There are a number of significant takeaways from this years study for boards and executives to consider:The churn in this years survey for 2024 and escalation of importance of several risks point to multiple sources of uncertainty,painting

110、 a cloudy picture of the business landscape.While not a surprise,our research results confirm that organizational risk profiles are sensitive to events and risks that can emerge rapidly and sometimes unexpectedly.The escalation of the importance of multiple near-and long-term risks conveys the stark

111、 reality of disruptive change in todays dynamic times.In the 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.As for the lo

112、nger term,executives remain on guard for what comes next as illustrated by recent events in the Middle East.Geopolitical events drive notable changes in risk perceptions.A notable trend in our global results this year is what the findings reveal before and after October 7,2023,when events in Israel

113、and Gaza erupted.Based on the responses submitted prior to this date,no risks were rated at the“Significant Impact”level for 2024,whereas after this date four risks are rated at this level:economic conditions(including inflationary pressures),cyber threats,ability to attract and retain talent,and th

114、ird-party risks.In addition,the scores for most risk issues increased post October 7,including the risk related to geopolitical shifts,regional conflicts and instability in governmental regimes or expansion of global terrorism.Whats even more telling are the risk scores in the 10-year outlook.Wherea

115、s five of the long-term risk issues were rated at the“Significant Impact”level among responses submitted prior to October 7,respondents after this date rated 12 at this level.Among the many notable jumps in scores,the geopolitical-related risk issue rose from 5.35 prior to October 7 to 6.06 after th

116、is date highlighting it as“Significant Impact.”Cyber threats,third-party risks,economic conditions,and the ability to attract and retain talent are among many other risk issues exhibiting a significant ratings jump.Clearly,events in the Middle East are elevating long-term concerns among directors an

117、d C-suite leaders about the impact on their businesses.Economic conditions,including inflation,represent the top risk issue for 2024.Economic conditions,including inflationary pressures,are the top-rated risk overall for 2024(up from second in 2023).Near term,uncertainty continues in the market over

118、 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 Wests de-risking reliance upon China,regional conflicts

119、,other developments in the geopolitical landscape,and increasing shelter,food and energy prices.The open question is whether these market developments and policies will lead |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduto some form of soft landing or to either a mild

120、or severe recession;or worse,a sustained period of stagnant growth.Organizations may face a dramatic change in the business landscape in the coming year,especially considering recent events in the Middle East and their potential to spread throughout the region.Underlying the uneasiness about the eco

121、nomy are concerns around the current interest rate environment significantly affecting the organizations capital costs and operations.Of note,while the rating for most risks in our survey decreased year-over-year looking out 12 months,economic risk declined the least among those risks that decreased

122、 from last years survey,remaining relatively stable year-over-year.Looking out 10 years,economic conditions represent the seventh-ranked risk.Economic headwinds remain a concern over the long-term,beyond the shorter-term issues such as inflationary trends that are driving current concerns.Cybersecur

123、ity is the most pressing risk issue when combining near-and long-term views.While the economy is the top-ranked risk for the coming year,cyber threats arguably stand out as the most significant risk issue for boards and C-suite leaders when assessing both near-and long-term outlooks.For the next dec

124、ade,cyber threats jumped from the 13th-ranked risk in last years study to the top-rated risk for the 2034 outlook.For this time period,the risk rating for cyber threats increased more than 11%by far the largest risk rating increase noted in the survey.Cyber concerns are also elevated near term,jumpi

125、ng from 15th in last years survey to third this year when looking out 12 months.Elevated cybersecurity concerns reflect growing recognition of a complex cyber risk landscape that is impacted by the exponential curve of technological advances.Specifically,considering the significance with which board

126、s and C-suite leaders view this risk over the next 10 years,its possible that technologies such as AI(including generative AI),cloud,and even the anticipated emergence of quantum computing and how organizations will secure their data and operations in a post-quantum world are raising significant sec

127、urity-related questions and concerns in the boardroom and C-suite.But other forces,such as increasing reliance on third parties and geopolitical tensions,also contribute to the threat landscape.Regarding the geopolitical picture,competing national interests,nation-state territorial aspirations and g

128、lobal terrorism are powerful forces that can affect cyber risk assessments in particular regions and countries.Ensuring privacy and compliance with growing identity protection expectations made the top 10 for 2024 as well,demonstrating the interrelated nature of cybersecurity and privacy risks.Amid

129、economic and cyber concerns,people-related risks also remain top of mind;culture and workplace evolution have taken a back seat at least for now.A number of important themes related to people and culture emerged from our results:Finding and keeping talent remains a major concern,even amid an uneven

130、economy.This is the second highest-ranked risk for both 2024 and 2034.The need to reskill and upskill employees is a challenge both now and in the future.The state of labor markets and the expected adoption of digital technologies requiring new skills in short supply are such that significant effort

131、s will be necessary to upskill and reskill existing employees over the next decade.This is the sixth-and third-ranked risk,respectively,for 2024 and 2034.It is clear that the solution to growth is rooted in increasing productivity,not headcount.Embracing technology is part of the solution,particular

132、ly in countries where the working population is declining,immigration policy is not aligned with this reality and offshoring is giving way to re-shoring.These market forces necessitate the need for upskilling the existing workforce.Rising labor costs continue to be a persistent concern.Driven by sho

133、rtages in skilled labor,increases in labor costs represent the ninth-ranked risk for both 2024 and 2034.Broader return-to-work trends in the market,workplace evolution are less of an issue.Managing |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edudemands on or expectation

134、s of the workforce to work remotely or as part of a hybrid work environment fell to the 24th-ranked risk for 2024,down from ninth for 2023.Leaders are seeing more clearly how to deal with this issue as the workplace continues to evolve.They are adapting to a world profoundly affected by the pandemic

135、 experience,a world in which many exited the workforce,have rethought work-life balance and/or are re-entering the workforce with different priorities.Culture-related risks have fallen in relative importance.Resistance to change restricting the organization from adjusting its business model and core

136、 operations fell from the fourth-ranked risk in both the 12-month and 10-year outlooks last year to 14th and 18th,respectively,this year.The organizations culture not sufficiently encouraging timely identification and escalation of emerging risk issues fell from eighth to 17th in the 12-month outloo

137、k and from 16th to 21st in the 10-year outlook.These declines may be due to companies emphasis on increasing organizational resilience and employees risk awareness in a rapidly evolving business environment.Third-party risks rise in importance.Interestingly,relative to other risks,third-party risks

138、increased from 17th and 15th in last years 12-month and 10-year outlooks,respectively,to fourth and sixth for 2024 and 2034,respectively,in this years survey.This increase is likely due to increasing reliance on outsourcing and strategic sourcing arrangements,ecosystem partners,IT vendor contracts,a

139、nd other partnerships/joint ventures to achieve operational and go-to-market objectives.Cyber threats and regulatory compliance risks(e.g.,data privacy regulations)also come into play here,as organizations must ensure their third-party vendors(as well as their third parties vendors further downstrea

140、m)are complying with current laws and regulations.It may also be attributable to the geopolitical climate,e.g.,the West de-risking its reliance on China,laws and regulations restricting business activities and operations in certain countries,and other developments having implications that extend to

141、an organizations reliance on third parties.These interconnected risks highlight the importance for boards and C-suite executives to take a portfolio,enterprisewide view of oversight of emerging risks.The specter of regulatory changes and scrutiny in wide-ranging industry-specific and pervasive areas

142、 looms both near-and long-term.Heightened regulatory changes and scrutiny increased relative to other risks,both near-term and long-term.This issue is the fifth-ranked risk overall for both 2024 and 2034,up from 16th and ninth overall in last years 12-month and 10-year outlooks,respectively.As conti

143、nued economic uncertainty increases the likelihood governments and various agencies will interfere with market functions through regulatory overreach and even excess,directors and C-suite leaders appear to perceive uncertainty over the likelihood and magnitude of forthcoming changes in the regulator

144、y landscape that will affect their organizations.These concerns are often industry-specific.For example:In financial services,various regulations in different regions may increase capital and liquidity requirements and compliance costs,resulting in higher borrowing costs and reduced shareholder retu

145、rns.Technology companies face increasing accountability for the impact of their innovations and products on consumers and the public,including the social implications of third-party content that misinforms and disinforms.Energy and utility organizations face scrutiny on the environmental impact from

146、 their production and use of fossil fuels.In addition,a growing number of laws and regulations emerging around the world have pervasive impacts across industries.Examples include data privacy,climate disclosures,sustainability reporting,cyber breach disclosures,expanded attestation requirements and

147、other matters,all of which may be elevating concerns among organization leadership.Many of these pervasive issues fall to public companies.Accordingly,it is noteworthy that they were the only organizational type to report a slight increase in the overall magnitude and severity of risks for |Executiv

148、e Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduPrior to the COVID-19 pandemic,regulatory risk was almost always rated a top 10 risk since this global survey began 12 years ago.Now that the pandemic is in the rearview mirror for most observers,regulatory uncertainty appears to ha

149、ve reclaimed its“rightful place”in the global risk profile.The 10-year top risks outlook:More disruptive times lie ahead.Long-term,the top risks landscape is relatively stable,as eight of the top 10 risks last year are on this years top 10 list.However,risk levels longer-term are elevated over the 1

150、0-year outlook last year and the near-term outlook this year.Six of the risks are rated at the“Significant Impact”level(versus three last year).Risk issues of concern looking out 10 years include cyber threats,attracting and retaining top talent and labor and succession challenges,the need for new s

151、kills to fully deploy newly adopted digital technologies,rapid speed of disruptive innovation,evolving regulatory issues,the impact of third-party risks on business performance and brand image,uncertain economic conditions,the limiting obstruction of aged technical architecture,anticipated labor cos

152、t increases,and inability to deploy advanced data analytics(the“big data”problem).This dynamic risk landscape and its elevated risk levels sustain the ongoing narrative that the 2020s are indeed a decade of disruption.With continued advances in AI,automation in all of its forms,ever-increasing conne

153、ctivity,quantum computing,blockchain and digital currencies,and the metaverse,the market is likely to experience the largest wave of disruption since the turn of the century.This disruption will manifest itself in many ways,e.g.,new business models,rapid product innovation,changing customer value pr

154、opositions and disintermediation of distribution channels,and different needs for skills and talent.It will sweep away obsolete strategies,traditional moats,technical debt-laden architectures,conventional management playbooks and old school employee skills.The never-ending question every organizatio

155、n faces in the global marketplace:Are we being disrupted and,if so,how and when would we know?Data privacy and“big data”remain key areas of focus.The complexity of the data privacy regulatory environment continues as a priority for organizations.Risks associated with data privacy are ranked 10th for

156、 2024 and 11th for 2034,compared with being ranked 12th and fifth,respectively,for the 12-month and 10-year outlooks in last years survey.Conversely,the risk of inability to utilize rigorous data analytics to achieve market intelligence and increase productivity and efficiency is ranked 10th overall

157、 looking out 10 years but is the 11th-ranked risk for 2024.Organizations successful in deploying forward-looking lead indicators and integrated analytics are likely to be more anticipatory and less reactive than those that arent and leaders know it.These capabilities generate the information and ins

158、ights so essential to arming decision-makers with a time advantage in disruptive markets.Climate change and sustainability risks have elevated.Growing focus on climate change and other sustainability policies,regulations and expanding disclosure requirements as well as expectations of key stakeholde

159、rs increased from the 28th-ranked risk looking out 12 months last year to the 22nd-ranked risk this year.Interestingly,looking out 10 years,this issue increased from the 20th-ranked risk last year to the 13th-ranked risk this year.Typically associated with existential planetary threats,climate-and s

160、ustainability-related risks are garnering more attention at a micro level by individual organizations relative to other risks.Growing regulatory focus(e.g.,the Corporate Sustainability Reporting Directive in the EU)is likely to keep this risk issue on the radar long-term.Note that the focus on clima

161、te change and sustainability is the second highest-rated risk in Europe.Therefore,it is important that leadership teams in regions such as the U.S.,where ESG is perceived as a polarizing concept,not construe the regional view as representative of a global |Executive Perspectives on Top Risks for 202

162、4 and a Decade Later|erm.ncsu.eduConcerns over supply chain issues have subsided.Uncertainty surrounding the core supply chain ecosystem is ranked 19th for 2024,quite a fall from ranking fifth in 2023.Many of the issues in the supply chain were a product of the disruption and congestion caused by th

163、e COVID-19 pandemic.These issues have been unwinding for some time.This risk was not viewed as a significant long-term concern last year and is not this year(ranked 25th looking out to 2034).Risk levels declined from last year but remain higher than two years ago.The participants were invited to rat

164、e the magnitude and severity of the total risk landscape impacting their organizations achieving performance goals over the next 12 months.On a 10-point scale,the overall ratings over the last three years are 6.35 looking forward to 2024,6.70 for 2023 and 6.21 for 2022,as illustrated in Figure 1.Of

165、note,impressions of the magnitude and severity of the risk landscape organizations will face over the next 12 months showed some differences pre-and post-October 7,2023,when the Israel-Gaza events erupted.The overall rating among responses collected before October 7 is 6.34,whereas it increased to 6

166、.51 among responses collected after October 7.FIGURE 1Overall,what is your impression of the magnitude and severity of risks your organization will be facing with respect to achieving your performance goals over the next 12 months?202420232022Magnitude/severity of risks6.356.706.214567Operational ri

167、sks,both near term and long term,dominate the risk profile composition over macroeconomic and strategic risks.Looking to 2024,eight of the top 15 risks are operational in nature and four are macroeconomic.Looking out 10 years,eight of the top 15 risks are operational in nature and the remaining seve

168、n are split between macroeconomic and strategic risks.The largest elevated risk rankings for 2024 reflect a broad focus.The four largest elevated risk rankings are the following(five risks tied for fifth and are not listed):From(2023)To(2024)Third-party risks 17th 4th Sustaining customer loyalty and

169、 retention25th 12th Cyber threats15th 3rdHeightened regulatory changes and scrutiny16th 5th These increased risk ratings reflect elevated concerns on various strategic and operational fronts and underscore the increasing complexity of the evolving risk |Executive Perspectives on Top Risks for 2024 a

170、nd a Decade Later|erm.ncsu.eduThere is significant churn in the top risks near-term.Six of last years top risks looking out 12 months fell out of this years top 10 list for 2024.From(2023)To(2024)Resistance to change 4th 14th Managing uncertainty surrounding supply chain ecosystem5th 19thImpact of c

171、hanges in work environment on culture6th 15th Culture not supporting timely escalation of risks 8th 17th Managing workforce expectations of hybrid work environment9th 24th Not sufficiently resilient or agile responding to a crisis10th 16th These risk issues were replaced with risks associated with c

172、yber threats,third-party risks,heightened regulatory changes and scrutiny,exposure to nimbler competitors(including those that are either“born digital”or investing heavily to leverage technology for competitive advantage),changes in the interest rate environment,and ensuring data privacy and complia

173、nce with proliferating identity protection expectations and regulations.The five largest elevated rankings in risks looking out 10 years are also mixed.The five largest elevated rankings in risks looking out 10 years are summarized below(two risks tied for fifth):From(2023)To(2024)Cyber attacks 13th

174、 1st Third-party risks15th 6th Impact of changes in work environment on culture22nd14th Geopolitical shifts,regional conflicts and political instability31st23rdGrowing focus on climate change and other sustainability policies,regulations,and expanding disclosure requirements as well as expectations

175、of key stakeholders20th13thChange in current interest rate environment26th19th The above risks reflect a mix of macroeconomic,strategic and operational concerns.Interestingly,the reference to geopolitical shifts and regional conflicts presages the developments in the Middle East commencing in the la

176、st week our survey was open.As indicated earlier,we noticed an uptick in this risk during that week.The top 10 risks for both 2024 and a decade later(2034)are highlighted in the charts that follow.As indicated by the red arrows,three of the top 10 risks for 2024 are rated higher than they were for 2

177、023,and nine of the 10 top risks for 2034 are higher than last years survey that also looked out a decade.Eight of the top 10 risks for 2024 remain top 10 risk concerns a decade from |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduTop 10 risks for 20241.Economic conditio

178、ns,including inflationary pressures 5.962.Ability to attract,develop and retain top talent,manage shifts in labor expectations,and address succession challenges5.933.Cyber threats 5.904.Third-party risks 5.635.Heightened regulatory changes and scrutiny5.616.Adoption of digital technologies requiring

179、 new skills in short supply 5.527.Existing operations and legacy IT infrastructure unable to meet performance expectations as well as“born digital”competitors 5.518.Change in current interest rate environment5.489.Increases in labor costs 5.4810.Ensuring privacy and compliance with growing identity

180、protection expectations 5.43Top 10 risks for 20341.Cyber threats 6.442.Ability to attract,develop and retain top talent,manage shifts in labor expectations,and address succession challenges6.273.Adoption of digital technologies requiring new skills in short supply 6.164.Rapid speed of disruptive inn

181、ovations enabled by new and emerging technologies and/or other market forces 6.155.Heightened regulatory changes and scrutiny6.136.Third-party risks 6.007.Economic conditions,including inflationary pressures 5.958.Existing operations and legacy IT infrastructure unable to meet performance expectatio

182、ns as well as“born digital”competitors 5.919.Increases in labor costs 5.8710.Inability to utilize rigorous data analytics to achieve market intelligence and increase productivity and efficiency |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduA series of calls to actionTh

183、e ever-changing risk landscape and the overall perceived magnitude and severity of risks should prompt boards and senior executives to scrutinize closely the approaches they use to remain focused on emerging risk issues and to integrate those insights into strategic decision-making.Now may be an opp

184、ortune time for boards and C-suites to examine closely where to invest not only to preserve market image and branding but also foster a strong recovery when the economy bounces back and prospects for growth improve.Given the long-term risk landscape,the question arises:What steps should be undertake

185、n or continued over the near term to ensure the organization is sufficiently agile and resilient to thrive in a decade of disruption?To help facilitate consideration of next steps,we present the following calls to action that executives and directors can consider when evaluating their organizations

186、readiness for the future as they cope with near-term business realities.We have centered these calls for actions along these key themes:Navigating an uncertain economic environment The cyber issues executives should be thinking about Forging ahead with artificial intelligence capabilities Embracing

187、new talent strategies Understanding and managing the geopolitical risk landscapeThese calls to action are not intended to be a comprehensive list of themes.They highlight issues common to most organizations that are worthy of further consideration and analysis.We also include a diagnostic in this re

188、port to assist companies in evaluating how they approach risk management and oversight in the digital age.It can be used to identify areas in which to improve risk assessment and risk management |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edu20Navigating an uncertain ec

189、onomic environment in 2024BY CHRIS WRIGHTGLOBAL LEADER,BUSINESS PERFORMANCE IMPROVEMENT SOLUTIONS,PROTIVITIDespite continued optimism in some quarters that a severe recession can be avoided and recent evidence that the pace of inflation may be slowing,our survey results show the economy as the top r

190、isk entering 2024.Because no one knows for sure whats going to transpire,we expect this risk to continue to be on the minds of executives throughout 2024.A fluid inflation dynamic leaves the market with uncertainty about the direction of central bank policies,geopolitical transitions that could make

191、 inflation sticky and the reality that many leaders havent faced an inflationary economy in their entire careers.Following are recommended steps for navigating this uncertain environment.Focus on generating reliable information for decision-making.Companies should deploy multiple,reliable and object

192、ive sources of historical and forecasted economic,inflation and related capital markets data.Key performance indicators and reliable reporting on customer,supplier,employee,lender,competitor and investor actions should be developed.Data sources should be given the same rigorous review management wou

193、ld ordinarily give to inbound and outbound cash flow requests.They deserve that high of a priority.Build a reliable forecasting(and reforecasting)capability.An inflationary and uncertain economic environment merits a dynamic forecasting and budgeting process.It should consider such market-driven fac

194、tors as:Impact of the economy on customer buying behaviors;Inflationary pressures on labor costs and employee mobility;Inflationary pressures on critical materials,components and supplies;and Inflation-fighting monetary policy impacts on the cost of capital.The forecasting and planning process shoul

195、d be objective and as free of bias and unplausible assumptions as possible.Quality real-time market data deters excessive reliance on historical data and trends when those trends may not hold up in the face of new and emerging realities.Alternative scenarios of alternative futures enable stress test

196、s of top-line performance,operating costs and cash flows.Monitor your(and your customers and vendors)financial strength,credit capacity and behavior.Depending on the magnitude of a downturn,should one occur,companies should prepare and undertake a hierarchy of initiatives to manage margins through h

197、eadcount reductions;compensation adjustments;reductions in selling,general and administrative expenses;cessation of expansion plans;effective hedging strategies;and discontinuance of underperforming operations,products and services.They should monitor and enforce approaches to minimizing customer cr

198、edit losses.They should also have a“Plan B”(or B,C and D)for sourcing critical materials,components and supplies in the event of economic disruptions of the supply chain.Finally,they should understand where they stand with lenders and shareholders with intention to preserve financial health.Dont for

199、get your employees.With the economy and inflation having an impact on employee anxiety,satisfaction and termination/retention decisions,straight talk and transparent communications are necessary to preserve morale and trust.No news does not necessarily mean good news.Of particular importance is the

200、impact of economic forecasts,company operating performance and inflation on compensation expectations.In uncertain times,the above steps will help executives and directors develop a response plan to deal with economic headwinds.Created in the cool of the day,the company will be more prepared and res

201、ilient should a downturn |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduThe cyber issues executives should be thinking about in 2024BY SAMEER ANSARIGLOBAL LEADER,SECURITY AND PRIVACY PRACTICE,PROTIVITIAs organizations continue to push their digital agenda,their data pro

202、liferates across the enterprise as well as outside their physical boundaries,and their attack surface continues to expand,cybersecurity presents a top-of-mind risk for executives and directors.Rather than rehash the table stakes of a strong cybersecurity framework,we offer the following actions for

203、leaders to consider as they enter 2024.Understand the substantial threat of ransomware.As companies focus on defending and protecting themselves against ransomware attacks,they also need to understand their resiliency and ability to restore systems to not only become operational on a timely basis bu

204、t also to demonstrate that any attack would not be a threat to their partners environments.Partners sharing their network connections and data need to be convinced that malicious payloads wiped from the companys environment are not a threat to theirs(and vice versa).Identify and retain cybersecurity

205、 talent.As more businesses move toward digitization,the need to protect against cyber threats and have the right talent in place to set and execute the cybersecurity framework becomes increasingly important.This reality requires businesses to think about their cybersecurity talent strategy.To that e

206、nd,many organizations are considering outsourcing or leveraging cybersecurity managed services from other organizations to buy the talent that they may not be able to hire on their own.This approach allows them to focus on defining the capabilities they really need in-house.Learn the generative AI t

207、hreat landscape.Generative AI can fuel more sophisticated attacks.Executives and boards are paying attention to this area through different angles.One is establishing appropriate governance and security around generative AI tools that are being created and used to drive the business strategy.The oth

208、er is understanding how bad actors are using these tools to create complex attacks on organizations and leveraging vulnerabilities at an alarming pace to outsmart defenses.The time is now for organizations to think about how they can leverage generative AI to aid in identifying attacks and establish

209、ing more effective automated mitigation capabilities.Assess proliferating cybersecurity and privacy regulations.While a risk-based approach is best practice in addressing cyber threats,there is an increasing focus on additional regulations requiring cybersecurity breach disclosures and various priva

210、cy regulations intended to protect consumers and individuals.Additional regulations related to AI,much like the recent executive order in the United States,are driving organizations to map their existing control environment against these evolving requirements and establish new policies and controls

211、to address any gaps that may exist.Expect executives and boards to push their organizations to establish defensible positions related to these regulations,while also making sure they dont obstruct their business strategy.Keep an eye on quantum computings impact on cyber.The rise of quantum computing

212、 has the ability to render obsolete existing cryptography methods.This is an area where organizations are starting to evaluate their strategy around encrypting data and establishing innovations to deploy quantum-resistant cryptography to secure against attacks that are backed by quantum computings i

213、ncreased computing |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduForging ahead with artificial intelligence capabilities in 2024BY CHRISTINE LIVINGSTONGLOBAL LEADER,ARTIFICIAL INTELLIGENCE SERVICES,PROTIVITIA global IBM survey of 3,000 CEOs indicated that half(50%)are

214、already integrating generative AI(GenAI)into digital products and services.Many are also concerned about data security(57%)and bias or data accuracy(48%).Only 28%have assessed the potential impact of GenAI on their workforces,and 36%plan to do so in 2024.Interestingly,seven of 10 non-CEO senior exec

215、utives report that their organization is not ready to adopt GenAI responsibly.With this backdrop,following are steps leaders should take:Identify opportunities for AI and GenAI now.Despite the challenges and uncertainties of GenAI,business leaders should be eager to seize the opportunities offered o

216、r else risk their businesses being disrupted.The risk of doing nothing is greater than the risk of doing something.Authorize an autonomous cross-functional team to review opportunities and formulate a strategy.Empower it with a shared vision giving it purpose,e.g.,improve the customer experience or

217、reimagine operational processes.In addition to thinking big and being disruptive,the team should:Be multidisciplinary,while being nimble enough to support rapid decision-making;Explore how GenAI is being used across industries;Identify practical opportunities that are aligned with overall business o

218、bjectives and the stated vision for AI and can drive meaningful business value;and Educate key individuals at an appropriate depth according to their expected contributions,and put the onus on these individuals to educate a larger group of people in the organization.Absent significant expertise in G

219、enAI capabilities,increasingly corporations are seeking external assistance to guide initiatives and support initial development.Establish a framework for evaluating use cases and managing risk.Once the team has defined potential concepts and use cases,each should be evaluated for feasibility and co

220、mplexity while also considering the availability of technologies to achieve desired outcomes.The team should:Evaluate the business benefit,architectural requirements,data integrations,security issues,and governance and compliance implications;Develop specific value measures expected from each select

221、ed pilot use case,with an eye for future unanticipated value;and Outline an anticipatory road map to optimize investments and visualize correlations and reusability across use cases.Leveraging GenAI capabilities requires leaders to develop ethical and responsible governance frameworks(to,among other

222、 things,ensure appropriate human involvement in critical decisions)and begin the journey with innovative pilots.Initiate pilots to confirm viability and demonstrate value.The team should facilitate the creation of AI-enabled prototypes to confirm that the concepts identified are technically viable,t

223、he data is sufficient,and that they demonstrate a path to delivering business value,exploring and tuning the model(s)iteratively to deploy pilot solutions.Establish business value metrics and KPIs to benchmark and monitor.Automating metrics and monitoring enables data-driven decisions about subseque

224、nt enhancements and possible future AI initiatives.Evaluations of the development process and the application itself result in improvements as the iterative process continues.Understanding the opportunities,limitations and risks of these models is a strategic imperative.Companies will be most succes

225、sful and unleash the most potential when infusing GenAI capabilities with their own proprietary data and |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduEmbracing new talent strategies in 2024 and beyondBY FRAN MAXWELLGLOBAL LEADER,PEOPLE ADVISORY&ORGANIZATIONAL CHANGE,P

226、ROTIVITITalent-related issues proliferate the top 10 global risks for both 2024 and the next decade.Attracting,developing and retaining top talent qualifies as a prevalent,pressing risk in an era when an organizations people greatly influence how well it addresses other top risk concerns,including c

227、yber threats,the adoption of digital technologies and advanced tools(e.g.,generative AI),third-party risks,and organizational resilience and agility,among many others.This makes it imperative for boards,CHROs and other C-suite leaders to reinvent their talent strategies through the following actions

228、:Adopt a new talent mindset.Your organization cannot rely on the ability to“go hire more”data scientists,nurses,systems architects,AI specialists,or other in-demand talent whenever it wants.Such types of prized skills are not widely available.Nor can you afford the costs and culture risks associated

229、 with yo-yoing between hiring binges and layoffs.A modern talent mindset:Focuses on the skills instead of roles or jobs;Prioritizes the value talent generates over its cost;Sources skills from a diverse and flexible talent pool of full-time employees,contract and temporary workers,expert external co

230、nsultants,and managed services and outsourcing providers;Treats leadership development and succession planning as a shared responsibility among all leaders;Leverages a resilient and innovative organizational culture as a recruiting and retention advantage.Align the talent mindset with business strat

231、egy.As organizational performance becomes increasingly reliant on the quality of people and teams,it is crucial to ensure the talent strategy aligns with the business strategy.Both game plans should remain in lockstep as strategic objectives change and as new opportunities and threats arise with gre

232、ater frequency.Take a talent inventory,assess,respond and repeat.Perform regular assessments of the organizations talent and skills.Map these to the skills and talent required to achieve the organizations short-and long-term business strategies.AI-driven workforce planning/design software and talent

233、 intelligence tools can produce detailed,real-time views of all of the skills that reside throughout the enterprise.Evaluate these talent inventories based on their alignment with longer-term business objectives.When skill gaps arise,develop strategies to close them.Distill these assessments and cor

234、rective actions into the periodic reports the CHRO delivers to the board.Institute rolling talent forecasts and analyze the financial impacts of talent scenarios.HR groups should take a page from FP&A teams by deploying a rolling forecast that focuses on the skills(in addition to headcounts)needed t

235、o execute strategic business objectives.By modeling the impact of different external factors(e.g.,labor cost increases)and strategic changes(e.g.,investing in generative AI)on the organizations skills requirements,HR leaders,working closely with business leaders,can identify future skills needs and

236、quantify the financial impact of various scenarios.Deploy new skills analytics.Measure and report on open positions,skills at risk,upskilling opportunities,DEI-and ESG-related metrics relevant to business objectives,and the health of the organizations culture(e.g.,well-being indicators).These metric

237、s help the C-suite monitor organizational effectiveness,which is the extent to which the workforce is delivering on strategic |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduUnderstanding and managing the geopolitical risk landscapeBY CAROL BEAUMIERSENIOR MANAGING DIRECT

238、OR,RISK AND COMPLIANCE,PROTIVITIGeopolitical risks occur as a result of a shift in power,a conflict or a crisis.The effects of geopolitical risk may be political,economic,societal(including environment,health and safety),legal and regulatory.These risks also impact cybersecurity.With conflicts and t

239、ensions currently spanning multiple continents and recent and upcoming elections potentially reshaping global politics,the following are important considerations for the board and the C-suite:Dont think that you are isolated from geopolitical risk.Those affected by geopolitical risk include not only

240、 large multinational companies that may find themselves in the middle of the fray,but also midsize and smaller companies across the globe that may experience a wide range of downstream consequences,including but not limited to commodity prices or shortages.Stay informed.The complexities of the geopo

241、litical environment may mean that general knowledge of world events is likely not sufficient to predict the consequences.Enlist the assistance of well-trained advisers who can offer advice based on experience,research and deeper market intelligence that may not be available to most individual compan

242、ies.Include geopolitical risk in your enterprisewide risk assessment.Consider and evaluate,through scenario analyses,the potential implications of the changing geopolitical landscape for the business and for customers of the business.Keep in mind that comprehensive scenario analyses may require cons

243、idering the consequences of more than one geopolitical event occurring simultaneously and that assessment of geopolitical risk must be dynamic.Develop contingency and resilience plans.Know what your course of action will be if geopolitical developments alter your business strategy or operations at l

244、east plan for the developments that are most likely or that would have the most significant impact on your company.Be mindful of escalating legal,credit and reputation risks.Following the Russian invasion of Ukraine,Western allies quickly and in a heretofore unprecedented manner turned to economic s

245、anctions in an effort to punish Russia for its actions.While there was broad agreement on the principles of whom and what should be sanctioned,national and regional sanction regimes rolled out the sanctions in different ways,creating significant compliance challenges and reputation risk for companie

246、s with direct Russian exposure or exposure through their customers.It is reasonable to expect that economic sanctions will continue to be used in other circumstances as public policy tools.And remember that sanctions imposed are often retaliated,creating legal and credit risk challenges for companie

247、s(or their customers)trying to unwind their exposure.Consider your response.How a company responds,or whether it responds at all,to geopolitical events has become a lightning rod for controversy and criticism.While every geopolitical event cannot be anticipated,the board and the C-suite should defin

248、e in advance the circumstances that would prompt messaging about an event to the organization(i.e.,internally)or to the broader market,and should outline the parameters of the response.Geopolitical risks are a global threat to business with no signs of abating in the near future.Managing these risks

249、 effectively should be a core competency for all |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduWhat you need to knowRisk perceptions vary by organization size:For 2024,organizations perceive a slight decrease in risk magnitude and severity compared to 2023,but overall

250、assessments are higher than two years earlier.Concerns in 2024 about economic conditions,talent and cyber threats are common across all size groups.Regulatory change is a top risk for larger organizations in 2024 and is the top overall risk for this group looking out to 2034.Third-party risks are no

251、table for midsize organizations.Smaller organizations face hurdles in adopting digital technologies due to the size of the talent pool.Long-term risk concerns are higher than near-term concerns for organizations of all sizes.Technology-themed risks dominate the list for the next decade.Across execut

252、ive positions,risks are expected to decrease somewhat in significance for 2024 relative to 2023,but are rated higher than 2022.CAEs have the highest perception of risk.CEOs and boards agree on the significance of risks.CFOs are the most optimistic.Economic and talent concerns are common across all p

253、ositions.Long-term risk concerns vary.Most industries rate risks lower for 2024,but overall concerns remain significant.Industry-specific risks vary.There is marked contrast in perspectives across industry groups about specific risk concerns.Cyber threats and talent concerns are common top five risk

254、s across most industries for both 2024 and 2034.Most industry groups rank concerns about economic conditions,including inflationary pressures,as a top five risk concern for 2024.Healthcare rates the most risks in 2024 as“Significant Impact.”Views on risks and risk levels vary across regions.Successi

255、on planning and talent concerns are common issues.Cyber threats and economic conditions are top risks.Strategic risk concerns are more common long-term.Public companies report increased risks for 2024.Top risks are reasonably consistent across entity types,with the most distinctive risk profile bein

256、g private companies with plans to go public.Not-for-profit and government entities have high risk concerns.Long-term risks increase for all types,with cyber threats,rapid speed of digital innovations and the need to upskill to deploy digital technologies as the top concerns.Investment in risk manage

257、ment is not likely to be higher in 2024 than 2023.Boards and executives need to adapt to the changing risk landscape and increase transparency.Whats next:Boards and executives need to evaluate their risk management approaches and monitor and address emerging risks proactively.Highlights of key diffe

258、rences across subsets of |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduIn addition to presenting overall risk insights from the 1,143 respondents,later sections of this report provide insights from the analysis of findings across different dimensions,including size of

259、organization,the leadership positions of respondents in the organization,industry group,geographic regions,and organization type(public,private,not-for-profit or government).Differences across sizes of organizations Organizations of all sizes perceive a slight decrease in the magnitude and severity

260、of risks in 2024 for their organizations in comparison to 2023,but their overall assessments of magnitude and severity of risks are higher relative to two years earlier.While this suggests some general improvement in risk conditions,in general caution still remains.Organizations with revenues betwee

261、n$100 million and$999 million perceive their overall business environment to be riskier relative to all other sizes of organizations,with an impact score of 6.52.What is striking for 2024 is the generally higher level of risk concerns for the two categories of smaller organizations(those with revenu

262、es below$1 billion).In both categories,respondents rated all of their top five risks as higher in 2024 relative to 2023.Collectively,this suggests smaller-sized organizations perceive the risk environment as more impactful for them near term relative to larger organizations.Three risks are common to

263、p five risks across all size groups for 2024:(1)Concerns about attracting and retaining talent,including succession challenges;(2)concerns that economic conditions(and inflationary pressures)in markets served may affect growth and profitability;and(3)concerns about cyber threats.Except for the large

264、st-sized organizations,concerns about economic conditions represent the top-or second-ranked risk across all organizations,while attracting talent and cyber threats are of greater concern for the largest organizations.Cybersecurity concerns are higher in the top five list of risks for the two larges

265、t-sized organization categories relative to smaller organizations.The visibility of larger organizations may make them a greater potential target for cyber disruption.Concerns about heightened regulatory changes and scrutiny are a top five risk for the two largest size categories of organizations fo

266、r both 2024 and looking out to 2034.The higher impact of this risk on larger organizations may be linked to recent regulations related to the climate-related disclosure rules in the European Union(and pending SEC climate disclosure rules in the United States)as well as required cyber breach disclosu

267、res,potential expansion of attestation requirements,and other matters that the largest organizations perceive affect them the most.Third-party risks made the list of top five risk concerns for the two organization size groups in the middle range for 2024.Perhaps reliance on third-party partners and“

268、Current economic conditions are proving to make short-and long-term outlooks as difficult to predict as they have been at any time over the past 50 years.Unemployment rates continue to hover near historic lows and consumer spending remains robust,despite traditional indicators such as inflationary t

269、rends and higher interest rates that would suggest the opposite should be happening.Given the level of uncertainty for the foreseeable future,especially with a volatile geopolitical climate further clouding economic forecasts,boards and management need to focus on assessing the right data,metrics an

270、d KPIs to assess the health of their business on a continuous basis and pivot with agility when necessary.”DR.PETER HENRY SENIOR FELLOW,HOOVER INSTITUTION&FREEMAN SPOGLI INSTITUTE,STANFORD UNIVERSITY;INDEPENDENT DIRECTOR;PROTIVITI ADVISORY BOARD MEMBER|Executive Perspectives on Top Risks for 2024 an

271、d a Decade Later|erm.ncsu.eduvendors is more notable for these organizations as they seek growth opportunities over time.The two categories of smaller-sized organizations rated perceived lack of skills needed for their adoption of digital technologies as a top five risk.Given the size of the talent

272、pool,smaller organizations may face greater hurdles in embracing emerging innovation as they compete for talent to help them leverage the advantages and fully realize the value proposition offered by new innovation opportunities.The differences in perceptions about long-term(2034)risk conditions rel

273、ative to near-term(2024)risk concerns is noticeable.In each of the four organization size categories,respondents rated all top five risks at“Significant Impact”levels,suggesting that their concerns about 2034 are of a higher risk level relative to their near-term risk concerns.Additionally,the two s

274、maller size categories of organizations rate all of their top five long-term risks higher than their assessments of long-term risks revealed in last years study.Clearly,respondents are expressing greater pause about long-term outlooks this year relative to their outlooks last year.Technology-themed

275、risks seem to dominate the list of top risks for a decade from now.All sizes of organizations rate cyber threats as a top five risk,with all except the very largest size category rating that concern as their number one risk issue.Concerns about the ability to adopt emerging digital technologies also

276、 is in the top five risks for all organizations,and risks related to the rapid speed of disruptive innovations enabled by new and emerging technologies made the top five risks for all sizes of organizations,except the smallest size category.Differences across executive positions represented The over

277、all impression across different executive positions with respect to the magnitude and severity of risks in the environment is that risks are decreasing for 2024 over 2023.The one exception is for chief audit executives(CAEs),whose assessment did not change between 2023 and 2024.It is worth noting th

278、at CAEs have the highest perception of the magnitude and severity of risks relative to all other executive positions.While there is a decrease in risk levels from last year,most executive positions rate the overall magnitude and severity of risk conditions for 2024 to be at the“Significant Impact”le

279、vel.Thus,the risk environment continues to be an important overarching issue for executives and boards to navigate.Only chief strategy/innovation officers(CSOs)and chief data/digital officers(CDOs)rate the magnitude and severity of overall risk conditions below that level for 2024.While CEOs rate th

280、e overall magnitude and severity of risk conditions for 2024 higher than board members do,both rate that overall concern at the“Significant Impact”level.There is general agreement in the relative significance among specific risks between CEOs and boards,given all of the 36 risks are rated at the The

281、 overall impression across different executive positions with respect to the magnitude and severity of risks in the environment is that risks are decreasing for 2024 over |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edu“Potential Impact”level(4.51 through 5.99)by both CE

282、Os and boards,except for one risk that CEOs rate at the“Less Significant Impact”level(4.50 or lower).Chief risk officers(CROs),CAEs and chief human resources officers(CHROs)see individual risks differently for 2024,with each executive position rating at least five of the 36 risks for 2024 at the“Sig

283、nificant Impact”level,whereas no other executive position rates risks at that level of impact.Interestingly,there is variation across those three groups as to the risks that rank at that level,suggesting they see differences in the relative significance of specific risks.CFOs are the most optimistic

284、 about 2024,given they rate nine of the 36 risks at the“Less Significant Impact”level.Most positions identify risks related to attracting and developing talent and risks related to the economy as top five risks,with eight of 10 executive positions including those two risks in their top five risk con

285、cerns.Interestingly,CHROs did not include concerns related to attracting talent as a top five risk concern.CSOs and CDOs are the only two positions to not identify the economy as a top five risk issue.There is general agreement among boards and CEOs in the specific issues included in their top five

286、risks in 2034,given four of the top five risks are the same for both positions.CFOs have somewhat differing views about the top risks compared to boards and CEOs,given CFOs are the only one out of those three positions to highlight concerns related to labor costs and the changing current interest ra

287、te environment as top five risk issues.This is not surprising as CFOs are always focused on market factors that can impact the bottom line.CEOs are the only ones among those three positions to identify risks related to heightened regulatory changes and scrutiny,reflecting their sensitivity to potent

288、ial constraints on the business model and strategy.For a decade out(2034),overall risk perceptions exhibit significant variation relative to 2024.Board members rate three of their top five risk issues at the“Significant Impact”level,while CEOs,CFOs and CROs rate none of their top five risks at that

289、level.CAEs have the most concern about the future,rating 15 risks at the“Significant Impact”level,including eight of the 14 operational risks an important point given that operations are a key point of focus in many audit plans.The 2034 results show an increase in overall risk concerns relative to s

290、hort-term risk concerns.As noted earlier,there is general agreement in long-term top five risks for boards and CEOs,with technology-themed risks comprising three of their top five risk issues.Additionally,all executive positions except CFOs include cyber threats as a long-term top five risk,with six

291、 of 10 positions rating that risk in the number one or two position for a decade later.Eight of 10 executive positions also include concerns about the adoption of digital technologies requiring skills in short supply as a top five risk concern 10 years from now.Six of 10 positions include concerns a

292、bout the rapid speed of disruptive innovation as a top five long-term risk concern.“It should be of no surprise to find that talent and workforce issues are prevalent themes in the lists of top risks for 2024 and the next decade.From retention and succession planning challenges to upskilling to meet

293、 the next wave of innovations and emerging technologies,organizations face mounting concerns that they will be unable to bring in the talent and skills needed to compete.Compounding these challenges is the approaching wave of retirement of a baby boomer generation of people that will leave a sizable

294、 gap in the workforce.”DAME INGA BEALE INDEPENDENT DIRECTOR,PROTIVITI ADVISORY BOARD MEMBER|Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduDifferences across industry groups Most industry groups rate the overall magnitude and severity of risks for 2024 somewhat lower tha

295、n their ratings for 2023,except for the Energy and Utilities and Manufacturing and Distribution industry groups,which rate 2024 risks higher than 2023.Despite slight reductions from prior year levels,respondents across all industry groups perceive the overall magnitude and severity of risks to be at

296、 the“Significant Impact”level,except for government-related entities.With the continuing transitions happening in the energy sector,it is not surprising that Energy and Utilities respondents believe that 2024 will be riskier than 2023,even though none of the 36 risks is rated by this industry group

297、at the“Significant Impact”level and 10 are at the“Less Significant Impact”level(4.50 or lower).The rating of 10 of the 36 risks as“Less Significant Impact”by Energy and Utilities respondents is more than any other industry group.There is a marked contrast in perspectives across industry groups about

298、 specific risk concerns,supporting the view that industry context is important to consider.But given that certain types of organizations business models may not fit neatly into a single industry category,reviewing differences in risk concerns across multiple industries may help tease out risks that

299、otherwise could be overlooked.Healthcare industry respondents rate the most risks at the“Significant Impact”level,with seven rated at that level for 2024.Four of their seven highest-rated risks are operational in nature,with specific concerns noted related to cyber threats,data privacy,third-party r

300、isks and talent shortages(most likely clinical healthcare workers,particularly nurses).Financial services respondents rate four of the 36 risks at the“Significant Impact”level,with two of those four relating to overall economic conditions and the current interest rate environment(both macroeconomic

301、issues),one related to heightened regulatory scrutiny,and one related to cyber threats.Three of the seven industry groups rate cyber threats at the“Significant Impact”level:Financial Services;Technology,Media and Telecommunications;and Healthcare.Financial Services,Consumer Products and Services,and

302、 Healthcare are all concerned about economic conditions,including inflationary pressures.Financial Services and Healthcare are the two industries most concerned about heightened regulatory scrutiny.All industry groups rate cyber threats as a top five risk concern,suggesting no industry is immune to

303、those exposures.All industries,except Energy and Utilities and Government,include concerns about economic conditions,including inflationary pressures,as a top five risk concern for 2024.And all industries,except Financial Services,highlight concerns about the ability to attract,develop and retain ta

304、lent as a top five risk concern for 2024.Increases in labor costs are of particular concern for Healthcare,Consumer Products and Services,and Government for 2024.“The fact that cyber threats are a critical risk next year and in the next decade is not a new revelation,but it does not diminish its imp

305、ortance or the threats that cyber attacks pose,especially over the long term.Given the increasing sophistication of technologies used to execute these attacks and their expected maturity by 2034,and particularly considering the rise of AI,most organizations likely see a cyber attack and/or breach as

306、 an inevitability.The question becomes what organizations should do about it.In short,they need the right people and skills to bolster cyber defenses,they need effective data governance and management practices,and they need to reduce or eliminate the technical debt that elevates their cyber risk.”A

307、DMIRAL DANELLE BARRETT INDEPENDENT DIRECTOR,PROTIVITI ADVISORY BOARD MEMBER|Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.edu The significance of risk concerns a decade out is noticeably higher than short-term risk concerns across the various industry groups.For five of th

308、e seven industry groups,all of the top five risks for 2034 are at the“Significant Impact”level.This is in contrast to the short-term outlook for 2024,where only one industry group(Healthcare)rated all top five risks at that level.Cyber threats are in the top five long-term risks for all industry gro

309、ups,as are concerns about attracting,developing and retaining top talent,including succession challenges.Four of seven industry groups are concerned about heightened regulatory changes and scrutiny.That is the number one long-term concern for Energy and Utilities organizations.Rising threat of catas

310、trophic natural disasters and weather phenomena is a top five long-term risk concern for Energy and Utilities organizations and Government Agencies.Consistent with prior years,the Energy and Utilities industry group rates a growing focus on climate change and other sustainability policies as a top r

311、isk concern.In addition,for the first time,the Manufacturing and Distribution industry group rated this risk as a top five long-term risk.Differences across geographic regions Globally,organizations from seven of the eight geographic regions in our study agree that the overall magnitude and severity

312、 of risks are of a“Significant Impact”nature for 2024.Four rate the overall severity and magnitude of risks for 2024 as higher than 2023,which is remarkable given that 2023 overall registered the highest result on this question we have observed in the 12 years we have conducted this study.There are

313、notable differences in views about risks around the globe,which is especially important for multinational organizations to consider.Respondents in North America,the Middle East and Africa rate at least three of their top five risks at the“Significant Impact”level,while Asia,India and Latin America d

314、o not rate any risks this highly.There is variation in the nature and types of risks included in the top five risks for the eight geographic regions.Fifteen of the 36 risks appear as top five risks among the eight geographic regions and seven of the eight regions report at least three operational ri

315、sks in their top five for 2024.All eight geographic regions include concerns about succession planning and talent acquisition and retention as a top five risk,and three report it as their top-ranked risk concern for 2024.Macroeconomic risks related to economic conditions and cyber threats are both r

316、anked in the top five risks in six of the eight regions.Looking ahead to 2034,strategic risks become more common in the top five risk concerns.The two most commonly cited top five concerns,each appearing in seven of the eight regions,are the risk associated with the adoption of digital technologies

317、with its implications to the reskilling and upskilling of existing employees and the risk associated with cyber threats.The significance of risk concerns a decade out is noticeably higher than short-term risk concerns across the various industry |Executive Perspectives on Top Risks for 2024 and a De

318、cade Later|erm.ncsu.eduDifferences across public and non-public entities For the three types of entities publicly traded,privately held with no IPO plans,and private companies with plans for an IPO for which we have comparative data,only public companies report a slight increase in the overall magni

319、tude and severity of risks for 2024.All five organizations rate that overarching concern at the“Significant Impact”level.While we separately analyze publicly traded companies,privately held entities with plans for an IPO,privately held entities with no plans for an IPO,not-for-profit entities,and go

320、vernmental organizations,we find that the top five risks across the five groups are reasonably consistent.Concerns related to succession planning and talent acquisition and retention are a top three risk concern for all groups.Concerns over economic conditions and cyber threats are in the top five l

321、ist of risks for four of the five groups for 2024.Public companies are concerned about uncertainties related to increased regulatory change and enhanced scrutiny,the current interest rate environment,and the adoption of digital technologies and the related need to reskill and upskill employees.Priva

322、te entities hoping to soon go public rate all five of their top five risks at the“Significant Impact”level,while public companies do not rate any of their top five risks at that level.Privately held entities with plans for going public are particularly concerned about organizational risk culture and

323、 privacy.Privately held entities(both those pursuing and not pursuing an IPO)also are focused on risks associated with third parties.Not-for-profit entities rate all five of their top risks at the“Significant Impact”level.Governmental organizations rate three of their five top risks at this level.Ch

324、allenges associated with escalating labor costs are of particular concern for both,with that risk appearing in the top five for both types of entities.Interestingly,when looking a decade ahead,there appears to be an overall heightened level of concern.All of the top five risks are rated at the“Signi

325、ficant Impact”level for 2034 for each type of organization,except for private companies with IPO plans.For this group,only one risk is rated this highly.For 2034,all five organization groups are concerned about cyber threats,rating that risk in their top five.Except for private entities planning an

326、IPO,all groups are also focused on risks for 2034 related to the rapid speed of disruptive innovations,succession challenges and talent acquisition and retention,and the need to upskill to deploy digital technologies.Private entities planning for an IPO are primarily concerned about risks related to

327、 growth strategies dependent upon M&A,increasing labor costs,third-party risks,and the effects of social media,along with cyber threats.Public companies are concerned about uncertainties related to increased regulatory change and enhanced scrutiny,the current interest rate environment,and the adopti

328、on of digital technologies and the related need to reskill and upskill |Executive Perspectives on Top Risks for 2024 and a Decade Later|erm.ncsu.eduPlans to improve risk management capabilitiesIn addition to asking respondents to rate each of the 36 risks for 2024 and 2034,we asked them to provide i

329、nsights about plans to enhance their organizations risk management capabilities in the coming year.Here are some key insights:In light of the finding that respondents report a decrease in their impressions about the magnitude and severity of overall risks for 2024 relative to the prior year,they als

330、o indicate a lower likelihood of deploying more resources to risk management in 2024 relative to 2023(and 2022).This result is not too surprising,especially considering the increased investment that has likely already occurred due to learning experiences from navigating through the pandemic.All grou

331、ps of organizations based on size indicate they are less likely to strengthen their risk management processes in 2024 as compared to 2023.However,organizations of all sizes still rate this likelihood at 6.0 or higher.In a similar vein,all executive positions signal a lessened need for increased inve

332、stment in risk management in the coming year.No industry group indicates an increased likelihood for investment in risk management from 2023 to 2024.The Financial Services industry group indicates the highest likelihood for 2024(6.59).Energy and Utilities is the only industry group with a status quo

333、 outlook related to investment in risk management infrastructure,with the score declining by only a marginal amount from 2023(6.19)to 2024(6.10).Organizations based in Asia,Australia/New Zealand,and the Middle East indicate an increase in likelihood they will invest more in risk management capabilities in 2024 relative to our 2023 results,with respondents in India reflecting the highest overall l