Global survey finds key business risks; could they be opportunities?
Post COVID-19, companies must harness trust opportunities to manage their risk profile.
Businesses are worried about reputation, but many are slow to take action to protect their reputation, a July survey from international accounting firm leader BDO has revealed. Senior risk experts reflected on how reputational risk is perceived now and in the future.
Diverse issues facing business were identified in the global survey of 500 C-Suite executives across Australia, Asia Pacific, Europe, the Middle East, Africa and the Americas.
Brand integrity and reputation
Themed ‘The Integrity Index’, the report highlights that being trusted is more crucial than ever before. Locally and globally businesses are increasingly vulnerable to reputational risk, with 70% having experienced an event that has threatened their reputation.
Almost all – 99% – of the respondents agreed brand integrity is vital.
62% of respondents believe their brand is either synonymous or closely tied to the chief executive role. Yet this reputational connection with the CEO is double-edged: 85% of respondents said the visibility of leaders introduces a high level of reputational risk, because an errant chief executive could significantly damage their brand.
Organisational reputation is a sensitive subject, with a hefty 87% of respondents believing their organisation is vulnerable to breaching their stated organisational values. Almost half (49%) of the respondents believed that even if the company is perceived to have integrity, putting their claimed values into practice is not a priority.
According to BDO, this reveals the scale of ‘integrity washing’ – the act of businesses caring more about the perception than the integrity of their practice.
Corporate culture & environmental governance – the big issues
Poor corporate culture is seen as a significant threat to 47% of organisations.
While corporate culture is the primary concern 50% of respondents are concerned about the different modes of work practised by new generations of workers, and 38% are concerned by the lack of diversity across their organisations.
Environmental concerns were identified as front and centre for global leaders. As many as 85% of respondents said their industry has been challenged by the wider community’s focus on better environmental governance.
Companies reported moving quickly to cope with risks associated with environmental concerns. Almost half of the respondents said they have reviewed their supply chain in response to environmental factors, and 47% said they have been affected by changing investment decisions from their businesses due to investors seeking better environmental governance.
Marita Corbett, National Leader for BDO Risk Advisory, explains the immediate pressures being felt by businesses.
“Our latest research has shown that four in ten leaders have implemented changes to their business to create better environmental governance – further evidence of how important green issues are to modern commerce and how if not addressed, lack of governance in this area becomes a real risk,” Corbett says.
Improving resilience to risk
“COVID has undoubtedly placed risk at the top of the C-Suite agenda and it has forced leaders to think about the full range of risks that all businesses face today.”
The report also offers suggestions for actions companies can take to remove their risk resilience, with the first being having a risk officer represented on the board. In the Asia Pacific and Australia regions, 46% say a risk officer holds a c-suite position, compared to only 22% in Europe.
The good news is that if you’re aware of the diverse range of risks facing your organisation, you’re in a better position to respond if they occur,” says Corbett.
The survey was conducted before Covid-19 hit, and questions are being raised about whether the pandemic could be amplifying some of these residual problems.
Corbett comments that a holistic and flexible approach is best. “Leaders must understand that their risk profile will continue to change as the world of business evolves,” she says.
Responding to touch-points of trust in a timely and relevant manner will be foundational to the success of future business.
Data, AI, BI & ML
Artificial Intelligence and Machine Learning are the terms of computer science. Artificial Intelligence : The word Artificial Intelligence comprises of two words “Artificial” and “Intelligence”. Artificial refers to something which is made by human or non natural thing and Intelligence means ability to understand or think. There is a misconception that Artificial Intelligence is a system, but it is not a system. AI is implemented in the system. There can be so many definition of AI, one definition can be “It is the study of how to train the computers so that computers can do things which at present human can do better.” Therefore it is an intelligence where we want to add all the capabilities to machine that human contain. Machine Learning : Machine Learning is the learning in which machine can learn by its own without being explicitly programmed. It is an application of AI that provide system the ability to automatically learn and improve from experience. Here we can generate a program by integrating input and output of that program. One of the simple definition of the Machine Learning is “Machine Learning is said to learn from experience E w.r.t some class of task T and a performance measure P if learners performance at the task in the class as measured by P improves with experiences.”