Risk outlook for 2024 – key takeaways

While talent management represents CFOs’ topmost 2024 risk concern, it is equally notable that four of their top 10 risks relate to talent management and organisational culture. In addition to hiring, retention and succession-planning challenges, finance leaders view labor costs; the workforce’s resistance to business model changes and adjustments to core operations; and the organisational culture’s inability to foster the timely identification and escalation of emerging risk issues as urgent matters. This is especially notable given the likelihood that current geopolitical, economic, political, social and environmental risks are likely to require swift and substantial strategic and operational adjustments – as well as early detection of, and proactive responses to, emerging risks.

CFOs have assumed deeper roles in developing and funding next-generation talent strategies and capabilities in recent years. This work should continue and expand. CHROs need help developing advanced skills analytics and talent KPIs that drive more precise talent forecasting and scenario planning. CFOs also can develop measures to monitor the extent to which the workforce is delivering on strategic objectives. Within finance groups, CFOs can strengthen succession planning and leadership development activities while investing in the upskilling and reskilling needed to help rising finance leaders progress faster and more effectively.

CFOs also understand that leading organisational cultures help companies sustain performance during economic turbulence – another top risk concern for 2024. Although a growing number of inflationary measures and interest rate risks have improved since the Top Risks survey was conducted in the fourth quarter of 2023, countless wild cards could come into play at any time. A widespread war in the Middle East, an unexpected labor report, a sudden spike in the consumer price index, contested U.S. elections, a massive cyberattack or a catastrophic weather event could trigger a recession, or worse.

CFOs should sustain their focus on a range of cost optimisation efforts. This includes searching for cost-reduction opportunities that position the organisation to achieve revenue and profitability improvements while simultaneously pursuing technology cost containment, conducting procurement-spending analyses, and achieving working capital management improvements. More resilient supply chains, forged via innovative approaches to supply chain risk management, also help counter economic, geopolitical, social and environmental risks.

Last, and certainly not least, cyber threats figure as a top-five risk concern for CFOs in 2024. Given their role in quantifying cyber risks and funding cybersecurity, CFOs typically address cyber threats more frequently – even on a daily basis – compared to other C-suite leaders (besides CIOs and CISOs). Their knowledge of cyber threats may explain why CFOs tend to estimate the magnitude of this risk less severely than CEOs and some other C-suite leaders.

With that said, cyber threats remain a top risk concern as finance leaders sharpen their focus on ransomware threats, the formidable challenge of hiring and retaining cybersecurity talent, AI-related risks, and emerging technological breakthroughs such as quantum computing.

Finally, CFOs recognise that cybersecurity and data privacy are closely related. This recognition stems from two factors. First, the importance of data privacy seems likely to increase in 2024 and beyond as new requirements – such as U.S. Securities and Exchange Commission’s (SEC’s) updated rules on cybersecurity risk management, strategy, governance and incident reporting by public companies – are adopted and enforced.^[2] Second, customers and other stakeholders have their own expectations regarding identity protection that often are distinct from what is required from a compliance standpoint. When organisations fail to address these expectations, customer loyalty and retention suffer.

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Overview of top risk issues in 2034

Cyber threats also qualify as a top CFO risk for 2034, although they rate just outside of finance leaders’ top five long-term concerns. This reflects the fact that CFOs view major cyber breaches as a matter of when, not if, in the coming decade. Two other technology-risk areas loom even larger in CFOs’ long-term risk assessments: the rapid speed of disruptive innovations enabled by new and emerging technologies and other market forces, and the adoption of digital technologies requiring new skills in short supply (a concern that also relates to talent management).

CFOs wrestled with the repercussions of both of these risks last year as GenAI swept through their industries, organisations and teams. Using GenAI to improve finance operations – by producing deeper insights that enhance existing forecasts, analytics, scenario planning, cash flow management, capital planning and fraud-prevention activities – requires finance to strike the right risk-reward balance. CFOs discovered that they can implement new governance guardrails for GenAI usages by applying their risk management mindset, controls expertise and governance experience to GenAI investments throughout the organisation. Finance leaders also realised that the adoption and optimisation of GenAI capabilities requires new skills that are both rare and expensive. As more technological breakthroughs emerge during the coming decade, CFOs will need to repeat and refine the approaches they currently deploy to help their organisations derive value from GenAI.

As mentioned, CFOs clearly view talent management as a systemic, long-term risk: attracting, developing and retaining top talent (along with managing changing labor expectations and navigating succession challenges) marks finance leaders’ top risk concern today and for 2034.

Heightened regulatory changes and scrutiny round out CFOs’ top-five 2034 risk concerns. Finance leaders understand that regulatory scrutiny will intensify, especially with regard to ESG matters and data security and privacy requirements.

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In Closing

As CFOs address their immediate and longer-term risk concerns, their traditional finance and accounting sphere of responsibilities will continue to expand. In 2024, this means a greater focus on talent strategy and cybersecurity. Ten years from now, the CFO’s span of control may well extend to the quantum internet, carbon sequestration and the ethics of brain-interface devices in the workplace.

About the Executive Perspectives on Top Risks Survey

We surveyed 1,143 board members and executives across a number of industries and from around the globe, asking them to assess the impact of 36 unique risks on their organisation over the next 12 months and over the next decade. Our survey was conducted in September and October 2023. Respondents rated the impact of each risk on their organisation using a 10-point scale, where 1 reflects “No Impact at All” and 10 reflects “Extensive Impact.” For each of the 36 risks, we computed the average score reported by all respondents and rank-ordered the risks from highest to lowest impact.

Read our Executive Perspectives on Top Risks Survey executive summary and full report below.