Resilience is no longer as simple as managing isolated risks. The interconnected nature of today’s risk landscape is spurring executives to reassess how they view risks and opportunities, so that they can prioritise the strategies and investments that will keep their organisations competitive.
That’s one key takeaway from the tenth edition of Aon’s Global Risk Management Survey. As leaders prepare to navigate technology, trade, weather, and workforce changes — what the survey refers to as the “four major megatrends” of this new era of disruption — many now require a fresh approach to managing those complex and interconnected risks across all business areas.
The survey found that for executives leading high-performing teams, their organisation manages risks holistically and teams use systems thinking to integrate risk with strategy and performance. Those leaders also said their companies “see risk as a function that can drive strategic value … rather than treating it simply as a cost of doing business”.
Aon surveyed nearly 3,000 C-suite leaders, risk managers, and treasurers globally between April and June.
All eyes on cyber risks
Cyber risk remains the No. 1 concern globally for leaders now and in the future. For executives surveyed, technology risks are multifaceted, extending beyond what is known and certain. “The rapid adoption of [artificial intelligence (AI)] and digital platforms is amplifying threats and creating new vulnerabilities, making proactive risk management essential,” the survey said.
To manage this uncertainty, organisations are moving to integrate cyber awareness into their culture and strategic planning, use AI for both cyber defence and innovation, and implement comprehensive business continuity plans.
Additionally, many organisations are “reassessing the function of risk capital” to protect technology investments and stay competitive as AI’s potential transforms. But AI is no longer a future issue, the survey warned, and rushing to deploy untested solutions is creating new vulnerabilities for organisations, making proactive risk management a strategic imperative.
The geopolitical connection
Woven through a number of the leading risks are rapidly rising geopolitical concerns and their potential to cause supply chain disruptions, economic and business slowdowns, and regulatory risks, according to the leaders surveyed.
“The convergence of domestic political instability, cross-border tensions, and rapid policy shifts means that even indirect exposure can result in material disruption,” the survey said. Getting ahead of geopolitical volatility — by combining local insights with a global view — can help organisations gain a competitive edge, the survey asserted.
Organisations preparing to weather the geopolitical storm are looking to harness growth from disruption. Those leaders are eager to tap into new markets, form strategic partnerships, diversify operations, manage supply chain and regulatory risks through scenario planning, and build financial resilience by optimising their company’s risk capital solutions.
The top five future risks in the survey — those predicted to be critical concerns in 2028 — are, in order:
- Cyberattack or data breach.
- Economic slowdown or slow recovery.
- Increasing competition.
- Commodity price risk or scarcity of materials.
- Geopolitical volatility.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.