Top Global Risks in 2023 and Projected for 2032

In the 11^th annual, 4^th Quarter of 2022, the “ERM Initiative” of the Poole College of Management at North Carolina State University, surveyed annually boards of directors and C-suite level executives regarding both Risks they belove to be of pending concern in both the upcoming year, 2023, as well as long-term prospective Risk on the ten-year horizon in 2032. The “ERM Initiative” identifies “Executive Perspectives on Top Risks”, focusing attention upon those Risk of greatest concern. The report identifies the concerns on the minds of executives for 2023 - and for the long-term - 2032. Drawing upon the contributions of 1,304 board members and executives globally, across a breadth of industries rating 38 macroeconomic, strategic, and operational risks that were previously identified and consolidated.

The most significant findings identified by the “ERM Initiative” by way of the report include…

• Global Marketplace Risks are ranking higher than they have in the past 10-years.
• The 10-year, 2032 outlook indicates a “disruptive” landscape for businesses.
• ‍Resistance to change is identified as a significant impediment to organizational success.
• People (Human Capital) and Organizational Culture continue to be Top Risks.
• Supply Chain Risks have been brought to the forefront for 2023.
• Risk associated with the effective use of “Big data” are along-term concern looking at 2032.
• Cyber security and Data Privacy are current and 10-year horizon Top Risk.
• ESG, while of significance, received “mixed” responses in this year’s survey.
• Prospective Regulatory Changes and the possibility of agency scrutiny are also of looming concern in 2023.
• However, in 2023 and moving forward, COVID is now considered an endemic, rather then a pandemic concern.

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Top 10 Risks for 2023

1. Organization's succession challenges and ability to attract and retain top talent in a tightening talent market may limit ability to achieve operational targets  

2. Economic conditions in markets currently served may significantly restrict growth opportunities

3. Anticipated increases in labor costs may affect ability to meet profitability targets

4. Resistance to Change may restrict the organization from making necessary adjustments to the business model and core operations

5. Uncertainty surrounding core supply chain ecosystem may continue for the foreseeable future

6. Changes in the overall work environment may lead to challenges in sustaining culture and the conduct of the business

7. Adoption of digital technologies may require new skills in short supply, requiring significant efforts to reskill/upskill employees

8. Organization's Culture may not sufficiently encourage the timely identification and escalation of risk issues

9. Approaches to managing demands on or expectations of a significant portion of workforce to work in a hybrid or remote environment may negatively impact talent retention

10. Organizations may not be sufficiently resilient and/or agile to manage an unexpected crisis

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Top 10 Risks for 2032

1. Organization's succession challenges and ability to attract and retain top talent in a tightening market may limit ability to achieve operational targets

2. Adoption of digital technologies may require new skills in short supply, requiring significant efforts to reskill/upskill employees

3. Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces may outpace ability to compete

4. Resistance to Change may restrict the organization from making necessary adjustments to the business model and core operations

5. Ensuring privacy and compliance with growing identity protection expectations may require significant resources

6. Existing operations and legacy IT infrastructure may not be able to meet performance expectations as well as "born digital" competitors

7. Inability to utilize data analytics and "big data" may limit the achievement of market intelligence and increase productivity and efficiency

8. Economic conditions in markets currently served may significantly restrict growth opportunities

9. Regulatory changes and regulatory scrutiny may heighten, noticeably affecting how products or services will be produced or delivered

10. Anticipated increases in labor costs may affect ability to meet profitability target

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‍“Resistance to Change”, “Organizational Culture” and “Resilience” are key factors, both now and looking into the next decade, that present as significant impediments to success moving forward. All Risks that speak to the need for organizations to address the need for Enterprise Risk Management (ERM) process, Risk Culture, and the establishment of Operational Resilience to better adapt to change and uncertainly.