Survey: Regulation and Compliance Are Top Business Risks This Year

The third annual Ernst & Young Business Risk Report is out, and this year, the survey reveals the most important business risks varied dramatically across sectors, regions and companies.

For example, executives ranked regulation and compliance as the top business risk across the majority of sectors, undoubtedly related to the aftermath of the global financial crisis and prompted by a general uncertainty in the market place driven by regulatory reform. However, limited access to credit and the threat of continuing weak economic performance in certain regions of the world remain high on the list of potential concerns, ranking second and third, respectively. And, the fastest growing risk seen by survey participants is their companies' abilities to succeed in emerging markets, a factor that is cited as a strategic imperative for global growth.

In addition to reflecting back over the past year, the report looks forward, hoping to predict business risks that will have a strong presence in the near future. According to the report, these risks include:


the internationalization of R&D activity. Ernst & Young points out that as global companies seek to capitalize on the growth of emerging markets by drawing on an international talent pool, the ability to nurture a culture of innovation in diverse geographies will become increasingly important.



emerging technologies and the prospect of substantial tax increases, presenting companies with a host of challenges that come with developing a flexible, adaptable business model.


"By focusing on the risks that weigh most heavily on the organization, both holistically and from an industry perspective, companies will be able to develop a cohesive integrated risk management process that will help sustain long-term business value," says Gerry Dixon, Ernst & Young LLP's Global Risk Leader. "Companies must harness the vast resources they deploy to manage and identify the risks that exist across the enterprise including internal audit, compliance, internal controls and operational risks. It is critical these areas work together to assist the organization in understanding and leveraging risks to create a strategic advantage."

The full survey report is available here.