Corporate Threat Level at Its Highest in a Dozen Years, New Report Shows

 
Escalating threats on multiple fronts are creating a ‘polycrisis’ of risk, with increased economic volatility, geopolitical upheaval and the disruptive force of AI driving the corporate threat level to its highest in 12 years, a new report shows.
A survey of C-suite decision-makers and legal counsel as part of Clyde & Co.’s annual Corporate Risk Radar report conducted in partnership with research consultancy Winmark Global found 67% of those surveyed said the risk landscape is more complex than it was just three years ago at the height of the covid crisis.
Economic risk such as inflation, interest rates and currency volatility was the top listed threat. Second on the list was “people” challenges, such as upskilling, management and succession planning.
Also on the list were risks associated with growing technology. While some said that artificial intelligence was a potential source of competitive advantage, others worried over a “Fear of missing out” on AI.
The fear of AI was a part of a wider risk category, regulatory and compliance risk,. According to the report, that category rose to 9% in 2023’s findings.
Geopolitical risk surged 11% from last year, ranking fourth due to further political uncertainty and upheaval making it the fourth biggest risk.Technological risks rose 7%, operational challenges rose 13%, market disruption rose 9% and reputational risks rose 6%.
Other report findings include:

Market disruption – including AI – was now believed to be the risk surveyed leaders feel least prepared for, topping climate change, geopolitical and societal risks.
General counsel were the least optimistic about their readiness to deal with market disruption, possibly reflecting their proximity to these risks compared to other leaders and board members.
Some highlighted the growing tension between boards and executive risk management, with the suggestion that boards were relying too often on executives to identify and present risks.

Source: claimsjournal.com
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