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As geopolitical tensions evolve into new forms, 40 per cent of board members and C-suite executives are are now identifying economic conditions as the most significant risk factor for their organisations over the next two to three years, according to a report by Protiviti.
The 2025 edition of Executive Perspectives on Top Risks report says that with inflationary pressures and global market shifts threatening growth opportunities and profit margins, business leaders worldwide are increasingly focused on navigating the uncertainties shaping the future of the global economy. The report added that economic conditions, including inflation, deglobalisation, and geopolitical tensions, have emerged as the number one risk globally for business leaders. This concern reflects the collective fatigue resulting from the uncertainty that has plagued global markets since the COVID-19 pandemic. The threat of protectionism, supply chain disruptions, and volatile fiscal and monetary policies have compounded these challenges, particularly as many economies outside the U.S. have yet to recover to pre-pandemic levels. Interestingly, while the risk of economic volatility dominates, business leaders are increasingly optimistic about their organizations' ability to handle future disruptions. The survey finds that board members and executives believe their companies are better equipped to manage change, demonstrating improved resilience, agility, and preparedness in comparison to previous years. This optimism is reflected in the growing confidence that organizations are now more adept at navigating crises, from cybersecurity threats to emerging technologies and shifting market conditions, the report added. According to the report, one of the top emerging risks identified is the rapid pace of disruptive innovations driven by new technologies such as Artitificial Intelligence (ANI). These innovations, which were ranked 13th in 2024 and 19th in 2023 as a near-term concern, now occupy the 8th position for the upcoming two-to-three-year horizon. However, concerns around external risks such as economic volatility and cyber threats remain critical. Cybersecurity, ranked second in near-term risks, is particularly pressing as cybercriminals exploit advancements in AI to launch more sophisticated attacks. Growing complexities of regulatory risk is another noteworthy finding of the report as it added that with regulations rapidly evolving, especially in light of increasing scrutiny on data privacy and AI deployment, business leaders are faced with navigating an unpredictable legal landscape. According to the report, talent-related risks are also top of mind for executives, particularly as organizations struggle to attract, retain, and upskill workers to keep pace with technological advancements. Geopolitical risk, ranked 14th, has become an increasingly significant concern for executives, particularly in regions outside North America. With rising tensions across Eastern Europe, the Middle East, and Asia-Pacific, geopolitical instability is beginning to have a greater impact on the global risk landscape. Trade conflicts, supply chain disruptions, and national security threats are all contributing to the sense of unpredictability that leaders must navigate in the coming years, the report added. (ANI)
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