Organisations need to change the way they respond to global risks if they want to stay competitive, according to findings from a new report from BDO, the accountancy and business advisory firm.
BDO’s annual risk report found that business leaders are facing almost permanent disruption, with 84% of respondents to its survey stating that the global risk landscape is now more defined by crisis than at any time in recent history.
The organisation’s survey of 500 business figures found evidence of a rapidly changing risk environment facing businesses globally.
Perhaps the most notable finding from the report is that regulatory risk climbed up 13 places to reach the number one spot in the league table of identified global risks, with 37% of respondents flagging it as a major concern compared to just 7% last year.
BDO claims that this may be due to anxieties around the impact of elections in major economies taking place this year.
Moreover, supply chain risk moved up one place to take the second spot. The general feeling is that this is most likely a response to the impact of shipping route disruption in the Gulf of Aden, as well as economic uncertainty and inflation.
At the same time, geopolitical tensions climed up three places to reach joint third, with Russia’s ongoing war in Ukraine and conflict in the Middle East being top of mind.
An interesting finding to address, cyber risk, which was named the second biggest risk in 2023, dropped to fifth place in 2024.
Environmental risk also dropped down to ninth place, underlining how quickly risk priorities can shift against a backdrop of constant disruption.
In addition, BDO’s survey also showcased that business figures have become less optimistic about the opportunities of artificial intelligence (AI). While three in five respondents (59%) said that they see AI as an opportunity, which is down from the 83% figure recorded last year.
Tim Foster, BDO’s Head of Risk Advisory Services, commented: “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.”
