Transcript | Executive Perspectives on Top Risks for 2023 and 2032 – with Mark Beasley and Jim DeLoach

Uncertainty in today’s global marketplace and the velocity of change continue to produce an array of potential risks that can disrupt an organisation’s business model and strategic plan on very short notice. The results of the latest Top Risks Survey from NC State University’s ERM Initiative and Protiviti indicate that the business landscape, to no surprise, looks much riskier for 2023 compared with this time last year. In fact, this year’s results reveal that executives and boards perceive the current business environment as the riskiest in the 11 years we have conducted this study.

This is Kevin Donahue, a senior director with Protiviti, welcoming you to a new edition of Powerful Insights. NC State’s ERM Initiative and Protiviti recently published our Executive Perspectives on Top Risks for 2023 and 2032 report. This report, along with our executive summary, infographic and more, are available at erm.ncsu.edu and protiviti.com/toprisks.

For this podcast, I had the pleasure of interviewing Dr. Mark Beasley from NC State University’s ERM Initiative and Jim DeLoach of Protiviti. Mark is the professor of enterprise risk management and director of the ERM Initiative in the Poole College of Management at NC State University. The ERM Initiative provides thought leadership about ERM practices and their integration with strategy and corporate governance. As founding director, Mark leads the ERM Initiative’s efforts to help pioneer the developments of this emergent discipline.

Jim is a managing director with Protiviti and a member of the firm’s Solutions Leadership Team. His market focus is on helping organisations succeed in responding to government mandates, shareholder demands, and a changing business environment in a cost-effective and sustainable manner that reduces risk to an acceptable level. He assists companies with strategy setting, business planning and performance management.

Mark, thanks for joining me today.

Thank you. It’s a pleasure to be here.

Jim, thank you. Great to speak with you again.

Thank you, Kevin. Glad to be here.

Mark, to get us started, I wanted to ask you to walk through what we did with this year’s survey in terms of the methodology, what our respondent breakdown was, and to give our audience an overview of who we polled and why.

Yes, I’m excited about this year’s survey. This is our 11th year to be surveying executives and board members from around the world, and I’m very pleased that we received responses from over 1,300 board members and C-suite executives from all parts of the world. We applied a very consistent methodology over the entire 11-year period, which not only gives us that neat ability to compare and look at last year and two years ago, but we also have a perspective of how things have shifted over the 11-year horizon.

As our methodology has been and continues to be, we’re asking executives to give us their perspectives on risks that they see on the horizon for their organisations for not only next year, 2023, but also a decade later, 2032. This is the third year that we’ve been able to ask about not only next year but also a decade out, and we’re very pleased to be able to do that again.

Each respondent was asked to give us their perspectives on 38 different risks that are very high-level, broad issues that are on the minds of executives, and we asked them to give us their perspectives of the significance of that particular risk, of each of those 38, using a 10-point scale where one is “This risk is not an issue at all” and 10 is “Extensively a concern” — it has an extensive impact for our organisation for next year or a 10-year window.

Among the 38 risks we surveyed, 36 of them were in last year’s survey. We did add two this year, but for the most part, we were able to then benchmark this year’s perspectives about 2023 to what they thought about in 2022. That allows us to look at these risks across multiple years and give you a sense of benchmarking from that perspective.

We have executives from all C-suite positions, almost 140 CEOs; we’ve got CFOs, chief risk officers, chief human resource officers, chief technology officers — and, importantly, 189 of the respondents are board of directors members. We have the board perspective and different C-suite angles that we’re able to look at this. We’re also at a global level, so we’ve got insights from eight different regions from around the world, which gives us that global perspective, and we’re able to understand and analyse differences across the different regions of the world. Similarly, we look at six different industry groups. That allows us to look at differences across industries as to what are risks that are top of mind for executives.

We’re very pleased that over 1,300 respondents are participating in this at a global level, multiple industries, multiple positions and multiple sizes of entity. We’re able to slice-and-dice, and that’s how the report is analysing data in a lot of different subgroups in addition to the full report as a whole. That hits the highlights of the key points of our methodology.

Thanks, Mark. You’re right — we’re all excited about the wealth of data and insights we have. I was thinking we could take our conversation today in a lot of directions, but I wanted to focus on the key themes, the major themes, we found in the results. I want to start, Jim, with the first one, which is uncertainty. That is something woven through the results by executive role, by industry, by geography, in a lot of different areas, and certainly embedded in a lot of the top risk issues. One of the things we see is increased risk, but there is also increased opportunity. Can you speak to that?

Sure, Kevin. Uncertainty is clearly evident in our survey results. When asked about perceptions of the overall severity and magnitude of risks, executives and board members rated both at the highest level that we have observed in all eleven years this study has been conducted by North Carolina State’s ERM Initiative and Protiviti. Of the 36 risks that we asked about this year that were also surveyed last year, 33 of them increased in risk severity year over year. We found that extremely interesting. It is clearly a changing risk landscape. There’s churn in all types of risks for 2023 relative to the prior year.

What we saw were five risks that were in the top 10 list last year fell out and were replaced by five other risks. The five risks that were in the top 10 last year that fell out included inability to manage data analytics and big data; cyber threats; government policies impacting business performance; shifts in perspectives about diversity, equity and inclusion; and market conditions imposed by the COVID-19 pandemic. The risks related to the pandemic did decline year over year. Risks related to data analytics, big data, cybersecurity, and shifts in perspectives about diversity, equity and inclusion did increase year over year, but they nonetheless fell out of the top 10.

The risks ranked below the top 10 last year that became a part of the top 10 this year included, to no one’s surprise, supply chain uncertainties, which was fifth on the top 10 list, impacts of workplace changes on culture and the business model, which was sixth, identifying and escalating market opportunities and risk issues, which was eighth on the list, the impact of the hybrid work environment on talent retention and on business operations, which was ninth, and resilience in responding to an unexpected crisis, which was 10th. These risks, when you look at it — when you look at the churn taking place and you look at the uncertainty that exists — it certainly suggests enormous opportunities, because executives and board members are telling us not only that the risk landscape is changing but also that new risks and opportunities can emerge and are emerging rapidly.

Mark, do you have any thoughts to add?

I want to support what you said in the sense that there’s this overall heightened perception of the risk environment for 2023, as you noted, almost all except for three increasing over the prior year. What I wanted to highlight too is that regarding the perception is coming through — it’s not dependent on a particular executive position. There’s a general sense across each of the positions — CEO, CFO, board member — of a heightened level of risk due to all this uncertainty from what they would’ve assessed last year. For example, more board members are indicating more of the risk, or what we refer to as Significant Impact risk, that received a score of 6.0 or higher on the 10-point scale. That number of Significant Impact risks is higher for board members than last year, and that’s true across most of the executive positions as they look at it.

As you’re pointing out, though, they’re not only seeing it as a risk, as a concern from a threat dimension, but also, as we’ll get into it, a number of the risks have a strong opportunity angle to it, particularly when it comes to leveraging technology and people, They’re seeing it as, while there’s a lot of uncertainty, that could be turned into an advantage if we approach it in the right way.

We’re definitely going to talk about people, and we’ll definitely talk about technology. I first wanted to hit on this theme of the economy and economic undercurrents. Mark, economic conditions certainly rank highly as a risk issue for the global responding groups and individual groups. Again, we’re seeing economic conditions woven into some of the other risk issues as well, and likely affecting how people are perceiving those areas. Can you discuss that?

When you look at one of our risks, which has been, over the 11 years, in the top 10 for the most part but this year zoomed to the No. 2 position, it’s the overarching concern about economic conditions, and particularly the concern being that the economy could restrict growth opportunities for organisations that they represent. With concerns related to inflation and then the central banks’ policies related to interest rates, it is creating a heightened sense of concern about overall economic conditions.

But there are other macroeconomic risks that are in the top 10. In addition to the concerns about the economy and restricting growth, a macroeconomic concern particularly tied to the labor markets is of heightened concern — the cost of labor going up. Concerns over how the market for labor and the war for talent continue to be increasing labor costs, which is going to have an impact on achieving profitability targets, and concern about how to deal with that. Then also, there is the macroeconomic concern tied to the labor market — being able to attract the skill they need to take advantage of digital technologies that could be emerging. What we’re seeing in the economy and concerns related to macroeconomic concerns are definitely hitting the top 10.

What is interesting to me is, we also analysed 38 different risks this year — 36 were in last year. Among those 36, we’re able to say which risks seemed to increase the most compared to where they were last year, and that is very interesting, in that the macroeconomic risks dominate the top five, increasing the most. Four out of the top five biggest increases over 2022 to 2023 are macroeconomic, concerns related to increasing interest rates and how that’s going to affect access to capital; geopolitical risks, dealing with that more macrolevel concern, the issues happening in Eastern Europe with the situation in Ukraine.

Then, related but somewhat broader than that is expanding and evolving global trade policies and political uncertainty around national leaders who have had some tenure, and some shifts in the political environment around the world all are dominating those risks that increased the most as we look into 2023. We shouldn’t be surprised by that given the global focus on what’s happening in Eastern Europe and the related risks tied to that, and it is dominating across most of the industry sectors as well. As far as the economic concerns, particularly restricting growth, it’s trickling across almost all of the industry sectors as part of the top five in each industry group. It is clearly top of mind among executives that are looking at 2023 particularly.

Mark, I like the way you put the backdrop of overall macroeconomic risk and framing the uncertainty around the economy. The global economy is a great contributor to the overall uncertainty that executives and board members are expressing. When you look, for example, from a macroeconomic standpoint of China’s zero tolerance for COVID, how that has exacerbated the pressures on supply chain and increased costs as a result of that. You add to that the increase in labor costs that you were talking about. Then, you’ve got the central bank policies all over the world all weighing in. That, of course, is increasing interest rates.

What’s so unique here is how that has increased the persistence of economic concern. It’s not just a near-term issue as we look forward to 2023 and the specter of a global recession on the horizon. Looking out, where are the growth opportunities going to be as we go forward? The uncertainties that are being expressed about the economy are longer-term, as indicated in our survey results, and that adds a dimension to this uncertainty that we’re seeing.

Yes. Jim, I was remembering too that when we look at the different geographic regions of the world, we analysed those across eight different geographies. We have 12 macroeconomic risks in the 38 risks, and nine of those 12 are appearing in the top five risks when you look across the different geographies. Interestingly, in Latin America, all top five risks are macroeconomic issues. It’s around the world, and particularly heightened when we look at Latin America.

Our full report, along with an executive summary, an infographic and more — the report is called Executive Perspectives on Top Risks for 2023 and 2032 — are available at erm.ncsu.edu and protiviti.com/toprisks. Jim, I want to segue into our next major theme: people, talent, skills and culture. Quite simply, if you look at the global results, they dominate the top 10. Your thoughts on why that is?

Without a doubt, people and culture are once again at the top of the agenda. That was the case last year. It’s the case this year. What we find here is that even amid an uncertain economy, and with inflationary conditions and fears of a possible recession over the next 12 months, people, talent and cultural issues are standing out as critical concerns to board members and C-suite executives.

There are several subthemes that have emerged in this respect. First of all, finding and keeping top talent is the top risk not only looking out 12 months but also looking out long-term. That is an important consideration here — not only acquiring and retaining talent but also the focus on succession challenges: How do you preserve and maintain your core of top talent? This is globally. Going back to Mark’s comment earlier about Significant Impact risk, how we measured that, this is the one risk that is rated globally at the Significant Impact level.

Then, there are other subthemes as well. The future of work continues to be a defining business challenge. We made that assertion two or three years ago when we saw the 2020s as a disruptive decade, but we also articulated that the future of work was a defining business challenge. This is the state of labor markets and the expected adoption of emerging technologies, artificial intelligence, automation in all of its forms and other technologies such that significant efforts will be necessary to upskill and reskill existing employees over the next decade to realise the full value proposition associated with these technologies. This is the seventh- and the second-rated risk for 2023 and 2032, respectively. This is another people-and-culture-type risk that has legs to it looking out 10 years.

As Mark indicated earlier, rising labor costs is an elevated concern. It’s on everybody’s mind, and there’s not a whole lot I need to add to that. Again, it was, interestingly, not only a near-term risk but also the 10th-rated risk for 2032 — another people and culture risk with legs to it looking out 10 years.

Culture remains a priority, and it has increased in significance relative to other risks. You have two aspects of this: First of all, resistance to change, we find that is an anomaly in that everybody sees a very rapidly changing risk landscape, and yet we’re resistant to change here in our organisation. Those are two different perspectives that simply don’t mix well — they’re oil and water. That’s one aspect of culture. The other one is the ability to escalate and communicate emerging risk issues and market opportunities upward through the organisation. That’s extremely important because without that, leaders risk losing touch with what’s happening in the marketplace. It’s the real action, and what’s really being seen in the marketplace is on the front lines.

Finally, another subpart is, workplace evolution is more of a near-term issue. These are concerns over whether an organisation can manage the ongoing demands on or expectations of a significant portion of the workforce to either work remotely or be a part of a transformed collaborative, hybrid work environment. This is the ninth-rated risk for 2023, but it’s not perceived as that important relative to other risks looking out 10 years. Longer-term, this is less of a concern, but near-term, leaders are struggling with it. The playbook hasn’t been written yet, and everyone’s learning as they go.

These are important risk issues, Mark, because talented people and culture are so interrelated. As the latter attracts the former and effectively led, the best and brightest engender innovative cultures that can compete and win in the digital age.

Yes. As you highlighted, it’s very striking, this dominance of concerns related to talent and culture interwoven throughout the top 10 and across the different breakdowns of how we analysed it. It’s interesting — part of that is, the talent side is dealing with the hybrid- and remote-work environment, and we’re still trying to figure out what are we doing there, and that ties in to resistance to change. We were forced to change — we’re trying to go back, in some places, to the old way. There’s resistance to that, and that can be where the opportunity is. People are realising if we can get creative with how we approach the talent and be more embracing of change, that can actually work in our advantage, and finding that sweet spot is the opportunity that organisations are trying to explore and figure out. If we don’t figure out the culture piece, then all of these risks are heightened.

As you highlighted, the one particularly related to the willingness for people to escalate risk issues to those at the top, if we can’t get that addressed, then there are risks working out there that our team might know about, but we’re not hearing it at the top. That is a huge issue that leaders, particularly boards, want to think about as they oversee the risk process to make sure that the talent is escalating and engaged in thinking about risk proactively. That’s where some opportunity for focus could be.

One thing I want to point out is, as we’re walking through these results and what different groups see, it’s fascinating, but our study also includes some calls to action on how organisations can address these areas. In fact, we have specific calls to action defined around ESG, and people, talent and culture, and innovation and transformation, and digital strategy. We also offer a detailed diagnostic for board members and executives to walk through to understand if they’re addressing these different risk issues effectively and, if not, how they need to address them.

Mark, this offers a great transition to our next theme: technology, innovation and transformation. Certainly, as both of you just discussed, people and skills are driving that, but more broadly, organisations are looking at, how do they employ more next-generation emerging technologies, and how do they compete against born-digital players? What are your views in this?

Yes. Obviously, technology is core to virtually every organisation, and the rapid pace of change in the technology and innovation space is creating a lot of the uncertainty, when you think about it, just as rapid deployments of new ways of doing business is something that our survey responders are very focused on. As Jim has highlighted, there’s that intersection with talent. One of the top 10 for next year is, will our organisation be able to adopt the digital technologies that we need to be competitive, and do we have the capability to acquire the skills that allow us to take advantage of those technology innovations as they come onboard? Can we attract the talent that we need, or can we upskill our existing talent to get them better prepared to deal with the technology?

When you look out a decade from now, the technology emphasis is very strong in the sense that a number of our top 10 risks for 2032 are tied to concerns related to technology and innovation. A number of the top risk issues deal with the ability to adopt the digital technologies and having the skill sets to do that. That moves into the No. 2 position a decade from now from being in the No. 7 position for 2023. It is a heightened concern as we look longer-term in that. Following, No. 3, 10 years out, is the concern about the rapid speed of disruptive innovations occurring that could outpace the organisation’s ability to compete without there being a significant change in their business model.

An overarching concern a decade from now is that innovations are going to appear in a way that’s totally disrupting how we currently think about the way we do business and we may be too slow to respond, which ties into what Jim’s already talked about: the culture. That resistance to change, as Jim talked about, is appearing in the 2023 list as a top 10. It is also in the same position a decade from now. When you connect resistance to change and concerns about disruptive innovation and not being able to keep pace and embrace digital technologies, all of these are intertwined.

We always tend to think that cyber concerns, cyber threats, will always be on the shortlist, and they are. Interestingly, cyber concerns and cyber threats are not in the top 10. Similarly, concerns about privacy and data security, they’re not in the top 10, but they’re close to the top 10 — like, No. 12 and No. 15.

Even though they’re not in the top 10, it's interesting to see that concerns about cyber-related threats and ensuring privacy and compliance with growing expectations related to privacy security, those increased over last year for 2023. The fact that they’re not in the top 10 doesn’t mean that they’re not important and they’re not top of mind, because they’re actually higher for each of those risks than they were last year. People were still very concerned about it, even though you might not see it in the top 10 for next year, but those do move into higher-level positions, particularly dealing with privacy and compliance with growing protection expectations for a decade from now.

As we look out further, the technology emphasis is especially strong in addition to the concerns about, can we have the skills to do the data analytics and the big data analysis to have that market intelligence we need? As well as, our technology systems, are we too dependent on a lot of legacy systems that are going to make us less nimble? Those are longer-term concerns. I would look at those as, while they’re initially a concern, embracing them, that’s where the opportunity kicks in. When you look at the decade-out risk, I see the technology themes reflecting opportunities out there if we can be proactive in how we navigate that starting today.

One thing that we have to constantly remind ourselves of, Mark, is, looking at the relative ranking of risks does not present the full picture, because these risks, like cyber and privacy, have increased year over year. It’s a relative ranking that pushes cyber and privacy down when you start looking at these more pressing issues around the economy, labor costs, and making margins and making the numbers.

What contributes to the whole overall concern about technology is, for a lot of incumbents, the need to modernise their legacy infrastructure because of the accumulated technical debt over time and how they need to focus on improving agility to deal with the speed of change and constantly improving customer experiences. Technology plays a big role in that, and all those factors add to the complexity of managing technology in this digital age we are all experiencing.

Jim, I wanted to have you talk about our next theme, digital perspectives. Obviously, we could have easily covered this in this prior theme on technology, innovation and transformation, but there are some additional issues to incorporate, or perspectives to address within digital, starting with some things we have talked about before, almost like creating a digital mindset, weaving digital into the fabric of your organisation. Can you expand on that and talk about why digital is so prevalent a theme in our study this year?

Digital has been prevalent in our survey for a number of years, and it’s certainly prevalent again this year. C-level executives and board members have shared concerns about the near- and long-term issues that frame a tough environment to strive at this, and executives have to bring a digital mindset to sustaining strategic relevance and continuously improving customer-facing and back-office processes. Leaders need only to look back to the turn of the century and what has happened since for the reimagining of business models and gauge the potential for significant change over the next decade.

Risks on the horizon for 2032 indicate an overarching intersection of disruptive innovation, advancing technologies and talent challenges. Executives indicate concerns about emerging innovations in their organisation’s ability to attract, afford and retain the skills needed to embrace change, particularly changes in technology infrastructures to compete with born-digital organisations and to leverage advance data analytics to garner the insight needed to be competitive. In the digital age, knowledge is not only power. Knowledge will also differentiate the winners and the losers. Speed and scale are being augmented, with greater bandwidth at lower cost, enabling new ways to compete as well as to connect with customers and a transformation of how companies as well as whole industries operate. These risks sustain the ongoing narrative that the 2020s is indeed a decade of disruption.

I agree with that. When you just look at the churn in what are the risk concerns for 2023 compared to a decade later, we can see a number of shifts in what’s on the longer-term horizon. It illustrates that we need to have this mindset that is nimble and agile, and that’s where the digital capabilities to track these very rapidly changing things and put ourselves in a more predictive capability are going to be important for real success as we think out for the long term — that capability given that the world is changing, it’s changing very rapidly, and we’ve got to be able to leverage technology and data to be able to use those as tools to be a little more anticipatory as we look at what’s on the horizon short-term and long-term.

For the last theme we’ll cover, Mark, I wanted to ask you about ESG. Environmental, social and governance matters are on the minds of every board member and executive today. Regulatory requirements continue to come out — reporting. Organisations are concerned about building sustainable supply chains. I can go on and on. What are you seeing in the landscape right now, as well as how some of that is exhibited in the results from our study this year?

It’s interesting, as you highlighted, the focus currently in the environment and a lot of discussion in the marketplace about thinking about risks that have a more specific climate impact with proposals here in the U.S., in Europe and in other places around the world. You might think that ESG-related issues would be in the top 10. One observation is, for the short term, we’re not seeing that overarching concern about environmental issues and climate moving in the top 10. In fact, it’s lower down the list than you might imagine, although it is higher for 2023 than it was last year. There’s a heightened concern about it.

Other risks, particularly the ones we’ve already talked about related to talent, technology and the economy, have pushed some of the concerns related particularly to the environment not as high on the list. It’s also important for us to keep in mind that E, S and G include things such as the environment but also social and governance. When you look at ESG, the S is very much dominating the top-of-mind risk concerns for 2023 when you think about all the talent-related issues and culture issues that we’ve already talked a lot about in this discussion. When you look at the S part of ESG, those are very much in the top 10 for 2023, and they do continue in a large way into 2032.

Concern related to diversity, equity and inclusion is not included in the top 10, but it’s still high relative to the other risk issues. It is still very much front and center on the minds of executives, even though you might not see that one in the top 10 right now.

I do want to go back to the environment piece. It is interesting — as I talked about earlier, it’s not a risk issue that is in the very top of the list of all the risks we looked at, with the exception of the industries that are more fossil fuel–centric. The concerns related to the environment are a top concern for energy and utility entities. In fact, the No. 1 risk for 2023 is rising threats associated with catastrophic natural disasters and weather phenomena are going to create some significant operational challenges. For the energy and utility sector, that is the No. 1 risk for 2023. That is very much, as you might expect for that industry, of top concern, and that stays the top concern for 2032.

Clearly, in certain industries that are going to be more impacted by environmental issues, that is the top risk in that particular industry sector. It begs for a reminder that context is critical as we think about these risks, that we’ve got to think about risk in the context of our individual business models and the industries we serve and operate within. That is why it is important to look at these risks in the context of how we do it in the study, not only on how different industries look at it, but also different sizes of entities as well, along with the other dimensions that we have.

Mark, if I can add to that last comment, because you summarised this very well in terms of how ESG issues are manifested in our study, when you look at environmental issues — and the focus on climate change — outside of fossil fuel–based industries, the way our risk statement was framed was whether companies see the effects of climate change resulting in a significant adjustment to their strategy and business model. The bottom line is, relative to other risks, they did not see climate change having as much of an impact on their strategy and business model as other risks.

Now, there may be those out there that are scratching their heads at this point, but it’s an important observation, due to other research that we have done at Protiviti that suggests that North American companies are lagging behind their European and Asia-Pacific counterparts in terms of their commitment to ESG issues, particularly with respect to environmental issues. Whether that is an accurate statement as of this time, we’ll find out through the test of time over the next several years, for sure.

Interesting. Jim, as you were saying that, I was reminded that when you look at the risk concerns particularly related to natural disasters and weather-related disruptions that I highlighted was a concern among energy and utility organisations, it’s also a top five concern for respondents in the Asia-Pacific region as well as Australia and New Zealand. It’s interesting. That particular risk issue is a concern in certain regions of the world, particularly for 2023 — a top five concern, that is.

This has been a fantastic conversation. Thank you both. I have one more question that I’ll pose to each of you. It’s the same question. Mark, I’ll ask you first. We’ve gone through a lot of findings, a lot of themes and certainly a lot of trends. For you, what’s the one big takeaway you have from the results of this year’s study?

Kevin, I look at the heightened overall concern about the severity and magnitude of risk across the board, and then the fact that, as we said earlier, all but three risks that we surveyed last year are higher this year, it emphasises the importance of thinking about risk in a more proactive way. Here at NC State in our ERM Initiative, I am obviously very focused on how entities approach how they think about risk and overseeing risk on the horizon, but all the different ways you look at the data and the study emphasise that there’s a value proposition to investing in how we think about risk. It’s in our best interest.

As we talked about, there’s a huge amount of uncertainty that is triggering all kinds of risk, and it’s happening at a very rapid pace. Across the board, we think it’s more severe for next year compared to this year, suggesting that there’s value if we invest more in how we think about and oversee risk and think about the infrastructure. What always strikes me — and it does this year — is the differences in viewpoints across different executive positions.

As I look at what board members are concerned about compared to the CEO, compared to the CFO and going down the C-suite line, there is so much variation and perspective about what are the critical risks. If we’re not talking about it as a leadership team with our board, we’re very likely approaching how we think about risk in a very disjointed way and very likely not focusing on the right ones for our organisation. I see this suggesting that it is worthwhile to ponder: Are we doing enough in investing in the right infrastructures to have a better handle on these rapidly changing risks that we’re facing, and is it something that we want to rethink as far as devoting additional resources?

One of the questions that we haven’t highlighted is the fact that we also ask, to what extent do you think you’ll be investing more resources to think about risk into the future? We definitely see, on average, a higher indication that we’re going to invest more in how we think about risk. That could be investing time and conversation, not just dollars, in how we think about risk compared to how we have in the past. That, interestingly, is true across all sizes of organisations. It’s not just the big ones that are focused in on that. That is the viewpoint across different executive positions that we surveyed. Each executive position, except for a couple of positions, is saying, “We think we need to invest more.”

My closing thought is: Think about whether we’re doing all that we need to do to be addressing the realities of the world that we’re seeing from a risk dimension.

Mark, one of the big takeaways is how a long-term outlook helps companies face the future with greater confidence. As I look at the churn taking place in the top risks looking out 12 months and looking out 10 years, it strikes me that understanding and managing toward the long view facilitates resiliency and agility in pivoting at the speed of change. This ties in, Mark, to your comment about getting a common view or having a shared perspective about the risk landscape. This is why the elevation we’ve observed in the resistance to change in this year’s survey is especially troubling. If you look at it, the complexity and volatility in the risk environment, coupled with the velocity of change, comprise a combustible mix when organisations fail to anticipate and adapt.

I hope that one outcome from this year’s survey is for companies to take a look at their culture, take a look at their ability to embrace change, their ability to let go of the status quo and listen to what the market forces are telling them, to make the necessary adjustments, because this is more than just survival. It’s also about the opportunity to thrive. Those organisations that cling to the status quo with the pace of change we’re seeing, they risk death by a thousand cuts going forward.

My thanks to Mark and Jim for joining me for this informative conversation, and thank you for tuning in. Again, our report, Executive Perspectives on Top Risks for 2023 and 2032, is available at erm.ncsu.edu and protiviti.com/toprisks. I hope you will subscribe to our Powerful Insights podcast series and review us whenever you get your podcast content.