Key Risks in Organizational Performance
A report by Ficci and EY highlights the primary risks affecting organizational performance, emphasizing the importance of an integrated approach to risk management.
Cybersecurity
- Cybersecurity breaches are identified as the top risk, with 61% of respondents highlighting it as the primary concern.
- 57% report potential data theft and insider fraud as significant risks.
- 47% acknowledge the difficulty in addressing increasingly sophisticated cyber threats.
- Cybersecurity is now a mainstream boardroom topic, beyond the responsibilities of chief security or information officers.
Technological Adoption and AI
- 59% of executives note the limited adoption of emerging technologies, such as artificial intelligence (AI), affects operational effectiveness.
- AI is seen as a dual risk area due to under-adoption and weak governance.
- 54% feel AI-related risks, including ethical and governance issues, are not being effectively managed.
Changing Customer Demands and Geopolitical Events
- 49% of respondents cite changing customer demands as a key risk factor.
- 48% mention geopolitical events as a significant concern.
Workforce Challenges
- 64% report talent shortages and skill gaps affecting organizational performance and long-term capability planning.
Environmental, Social, and Governance (ESG) Compliance
- 45% indicate non-compliance with ESG disclosure requirements impacts their organizations.
- 44% identify non-compliance with ESG mandates and reporting as a major risk.
- 42% express concerns about the effectiveness of board oversight on ESG issues.
Integrated Risk Management
- The report underscores the need for organizations to integrate risk into strategic decision-making, governance, and long-term planning.
- Organizations face a convergence of risks, including inflation, cyber threats, AI governance, climate exposure, and regulatory changes.
- Interconnected risks require strengthening oversight, capability planning, and decision-making to ensure stability and sustained performance.
