More focus on risk management

The first flurry of predictions for 2018 are beginning to drift in. While technology disruption, natural disasters and cyber risk are all near the top of most lists published so far, risk management has also gone up the agenda for executives.

C-suite respondents to a survey by the consultant Protiviti – Executive perspectives on top risks for 2018 – said that they are likely to devote additional time or resources to risk identification and management over the next 12 months. “The overall reality of the riskiness of the global business environment continues to motivate boards and executives to continue their focus on effective risk oversight,” the report concludes.

Executives said that one of the top five risks is the inability of their organisations to change. “As many organisations have discovered in recent years, strategic error in the digital economy can be lethal,” said the report. “If major business model disruptors emerge, respondents are concerned that their organisation may not be able to timely adjust its core operations to make required changes to the business model to compete.”

There is a similar focus on risk management in PwC’s Global state of information security survey 2018, which says: “The growth in digital devices is driving risk management.”

The devices in question are networked items connected via internet of things (IoT) technology, ranging from objects such as sensors and business office equipment, to warehouse inventory and home entertainment systems.

The report says that the rapid spread of IoT devices is making consumers demand products with better cybersecurity and privacy. This has led to organisations revamping their security policies. Key IoT investment areas include policies and technologies to protect consumer privacy, as well as data governance policies, said the report.

“Respondents recognise that a successful cyberattack on automated or robotic systems could have major consequences,” the report added, “including the disruption of operations, the compromise of sensitive data, and damage to product quality.”

The good news is, of course, that risk managers’ increased status and profile within their organisations is set to get a further boost in 2018, if these predictions prove to be accurate.

Season’s greetings from the Enterprise Risk team.