By Marcus Leach
Research conducted by Aon has revealed that business leaders across the globe identify economic risk as the greatest threat they face today, but also emphasised the need to innovate, mitigate technology failure and manage talent to compete in the future.
As the global economy continues to recover, the threat of sustained economic trouble weighs heavily on the nearly 1,000 business professionals from 58 countries who participated in the 2011 Global Risk Management Survey.
This group identified the economic slowdown as the number one risk facing organisations across all geographies, with 67 percent of respondents reporting loss of income in the last 12 months associated with this risk.
The report listed the top ten risks global companies, as well as Uk-based companies.
Risk Management Survey Top 10 Risks (Global)
1 - Economic Slowdown
2 - Regulatory/legislative changes
3 - Increasing competition
4 - Damage to reputation/brand
5 - Business interruption
6 - Failure to innovate/meet customer needs
7 - Failure to attract or retain top talent
8 - Commodity price risk
9 - Technology failures/system failure
10 - Cash flow/liquidity risk
Risk Management Survey Top 10 Risks (UK)
1 - Economic slowdown
2 - Damage to reputation/brand
3 - Regulatory/legislative changes
4 - Increasing competition
5 - Failure to innovate/meet customer needs
6 - Technology failure/system failure
7 - Business interruption
8 - Failure to attract or retain top talent
9 - Political risk/uncertainties
10 -Exchange rate fluctuation
“The findings shared in our report underscore the undeniable interdependence among various risks as well as economies around the globe. It is more important than ever for organisations to embrace an enterprise-wide approach to managing risk, and optimise their strategy on a global basis,” George Zsolnay, head of Aon Analytics in the U.S., said.
With UK companies the risk seems to be centred around the uncertain financial stability of European countries.
“In the UK and Ireland, businesses are acutely aware of the uncertainty surrounding the financial stability of European nations, which is most likely the reason we see political risks and exchange rate fluctuations in their top 10 concerns," Rory Moloney, head of Aon’s Risk Consulting business in Europe, the Middle East and Africa, commented.
"This survey was conducted prior to the upheaval in the Middle East and North Africa, as well as the New Zealand and Japan earthquakes, so it is possible these concerns would be even higher on the list today.“
For the first time in survey history, failure to innovate/meet customer needs made the top 10 list of global risks, debuting at number six. This development reflects growing concern about the risk of losing market share to more forward-looking competitors.