Key takeaways are offered below.
The 10-year outlook presages disruptive times ahead. The need for new skills in the evolving workplace, the rapid speed of disruptive innovation, data privacy concerns, competition with “born digital” players, management of “big data” issues, economic headwinds, the regulatory environment, increased labor costs, exposure to substitute products and services, ease of entrance of new competitors, cyber threats, the challenge of sustaining customer loyalty, and third-party exposures are all significant risks looking out 10 years. These risks — combined with other risks related to talent shortages, resistance to change, and the evolving workplace and culture — sustain the ongoing narrative that the 2020s are indeed a decade of disruption.
People and culture are a long-term strategic imperative. The top risk overall for 2032 pertains to ability to attract and retain top talent in a tightening market and succession challenges. The expected impact of new technologies on the nature of work will necessitate significant efforts to upskill and reskill existing employees over the next decade. Rising labor costs are expected to be a long-term concern. So is culture, as resistance to change has become a formidable obstacle to success.
Economic issues remain significant. The cloudy economic picture renders a singular view of the future as a fool’s errand.
“Big data” is an even bigger player for the long term. In the long term, insightful data and intelligence will win, and everyone knows it, which is why this risk is ranked as high as it is relative to other risks.
Cybersecurity and data privacy have escalated as long-term priorities. The speed of technological change, an ever-transitioning workplace design, evolving business models, proliferating regulatory requirements and workforce turnover increase the challenge for organizations in managing these ever-present threats.
Climate change risk is a priority primarily for fossil fuels-based companies. Concerns over the effects of climate change on the business have increased looking out longer term but are ranked about where they were last year. Outside of industries concentrated in fossil fuels generation and use, many respondents do not perceive the risk of adjustments to their business strategy as a result of climate change with as much concern as they view the implications of other risks.
The largest risk increases support the narrative of a changing world. Looking out 10 years, the five largest increases noted relate to geopolitical shifts and regional conflicts, activist shareholders risk, global trade and changing assumptions underlying globalization, transitions to a remote and hybrid work environment, and political uncertainty.
The risk of regulatory changes and scrutiny continues to loom large. As a top 10 concern for the long term, this risk and its implications to the processes, products and services of the organization remain top of mind for many business leaders.
A long-term outlook helps companies face the future confidently. Understanding and managing toward the long view facilitates resilience and agility in pivoting at the speed of change. This is why the elevation of concerns regarding resistance to change in this year’s survey results is troubling.
We encourage interested parties to read the executive summary of our survey results to learn more. Consistent with prior years, there are variations in views regarding 2032 among boards and C-suite executives and across geographic regions and multiple industry groups.
The board of directors may want to consider the relevance of our survey’s 2032 insights to the company’s business if they are not included in management’s formal risk assessment process.
For more about key takeaways from our global survey of C-level executives and directors, read the article here.
(Board Perspectives — Issue 160)
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