Regulatory pressure is the biggest threat facing companies across industries, according to a recent study of C-suite executives (mainly CEOs and CFOs) conducted by consulting firm KPMG International. The most threatening risk scenario (i.e., an issue potentially on the horizon) is the occurrence of another global economic crisis or geopolitical instability. Also, 70% of respondents say that regulatory changes have caused either substantial or moderate changes in their risk management and reporting processes over the past two years.
"Risk management is not advancing fast enough at most companies in the face of an array of threats in an increasingly complex global economy," says Mike Nolan, KPMG International's global leader for risk consulting. "But companies can transform these challenges into a competitive advantage. All of their competitors are in the same boat, but very few are going to take advantage of the regulatory onslaught to become more competitive. The companies that do will be in a strong position to turn regulatory risk into an advantage."
When asked to rank the top-three threats facing their industry, C-suite executives named the following:
46% Regulatory risk
41% Reputational risk
28% Supply chain risk
17% Information protection/security/fraud
17% Disruptive technology risks
13% Data governance and quality
12% Legal risk
11% IT infrastructure
9% Social media
9% Natural disasters
7% Climate change