Last updated: 01 Jul 2024 04:00 Posted in:
Businesses need to change the way they respond to global risks if they want to stay competitive, according to a new report from accountancy and business advisory firm BDO.
Its annual risk report, called ‘Antifragility: Risk as a Driver for Success’, found that business leaders are facing almost permanent disruption. Some 84% of respondents to its survey said that the global risk landscape is now more defined by crisis than at any time in recent history.
Regulatory risk climbed 13 places to the number-one spot in the league table of identified global risks, with 37% of respondents flagging it as a major concern compared with just 7% last year, the report found.
Supply chain risk moved up one place to take the second spot, most likely a response to the impact of shipping route disruption in the Gulf of Aden and economic uncertainty and inflation. Meanwhile, geopolitical tensions rose three places to joint third, with Russia’s ongoing war in Ukraine and conflict in the Middle East being cited.
Cyber risk, the second-biggest risk in 2023, dropped to fifth place in 2024, while environmental risk also dropped down the league table to ninth, underlining how quickly risk priorities can shift against a backdrop of constant disruption.
The survey also found that business leaders have become less optimistic about the opportunities of AI. While three in five respondents (59%) said that they see AI as an opportunity, this is down from 83% recorded last year. This may reflect a growing pragmatism after a year of separating hype from reality.
Tim Foster, BDO’s head of Risk Advisory Services, said: “Set against the backdrop of constant disruption, it’s clear that business risk priorities are shifting quickly and significantly.
“While all organisations need to be alive to the risks they face, they also need to be nimble enough to respond in a way that keeps their business moving forward.
“Our research suggests the risk appetite among businesses has been dented following a period of sustained disruption. However, businesses that change their mindset and lean into the risks they face can often become more resilient and thrive when exposed to stress.”
“Our research suggests the risk appetite among businesses has been dented following a period of sustained disruption. However, businesses that change their mindset and lean into the risks they face can often become more resilient and thrive when exposed to stress.”
Tim Foster, Head of Risk Advisory Services, BDO.