Australian executives fear that their businesses will still be feeling the effects of COVID-19 in a decade’s time, according to a major global survey released overnight.
Some of those effects – such as remote working and the shift to online shopping – will continue to present risks as well as opportunities for Australian businesses, according to more than 1,000 executives interviewed for the ninth annual Protiviti Top Risks Survey.
Worries about shifts in consumer behaviour linked to COVID ranked No.2 in Australia among the 36 risks identified in the survey – although executives globally are not so worried about the lingering effects of the pandemic. They ranked the same issue 12th overall, a result mirrored among US-based executives.
The survey canvassed the views of 1,081 board members and C-suite executives from eight regions around the world.
Protiviti Managing Director Garran Duncan said that considering Australia’s effective response to the pandemic – particularly compared to the US – the local survey results were surprising.
“The supply chain of many Australian companies was seriously compromised by the pandemic, and we believe that ultimately affected the way Australian executives voted,” Mr Duncan said.
The No.1 risk in Australia was the threat of substitute products and services. But while this was ranked No.1 in Australia, it placed only 8th among executives globally, and 6th in the US.
The No.1 risk globally was the move to digital technologies requiring new skills or significant efforts to upskill existing employees. Australian executives saw much less concern in the need for new tech skills, which did not make Australia’s Top 10 risks.
Mr Duncan said that although Australia is blessed with relatively strong IT skills, greater investment will be needed in the near term to lure greater digital talent to the country, utilise the latest business technologies, and reinvent business models to sustain organisations’ relevance over the next decade.
“This reality is triggering a related strategic concern that companies will not be able to keep pace with the rapid speed of disruptive innovation,” said Mr Duncan. “Facing the future with confidence requires a commitment to position the organisation for a disruptive future.”
There were several major differences between Australian executives and their overseas counterparts:
- Working from home or the office and its effect on running a business was ranked 5th in Australia but 31st globally and 28th in the US.
- The threat of not being able to adapt business models to embrace the evolving “new normal” was ranked 7th in Australia but a lowly 34th globally and 33rd in the US.
- Growth opportunities through acquisitions/joint ventures may be more difficult to identify and implement – an issue ranked 8th in Australia, but 24th globally and 27th in the US.
“Unfortunately, some organisations continue to manage risks the way they have for many years, even though the risk landscape is changing dramatically as businesses and entire industries are transformed in the digital economy,” said Mr Duncan.
“The need for greater transparency about the nature and magnitude of risks undertaken in executing an organisation’s corporate strategy continues to be high as the expectations of key stakeholders regarding risk management and risk oversight remain strong.”
The one commonality across all executives was the effects regulatory changes might have which affect the way products and/or services are produced or delivered. This ranked No.3 in Australia and No.2 globally and in the US.
Top 10 issues for 2030 of Australian executives
Top 10 issues for 2021 compared to 2030 of Australian executives
The “Executive Perspectives on Top Risks for 2021 and 2030” report from Protiviti and North Carolina State University provides respondent details broken out by company type, size, industry, geographic region and respondent role. The report, along with an infographic and a podcast about the survey results, is available for complimentary download here. Protiviti hosted a one-hour webinar with a panel including Beasley, Bozzella, DeLoach, Scott and Manisha Shah, a Protiviti managing director and leader of the privacy practice, where the implications of the survey findings were discussed. Register to listen to the on-demand recording here.
About the ERM Initiative
The ERM Initiative (www.erm.ncsu.edu) in the Poole College of Management at North Carolina State University provides thought leadership to help executives and boards strengthen their oversight of enterprise-wide risks as they develop and implement strategies for growth. The ERM Initiative’s website hosts over 600 articles, thought papers, and best practices documents to help business leaders navigate today’s uncertainties for tomorrow’s strategic success.