Analysis Across Executive Positions
Notable observations – 2023 risks
- The overall impressions collectively across all executive positions with respect to the magnitude and severity of risks in the environment are that the level of risk is increasing from 2022 and all groups view it as higher than in 2021.
- This increase in risk expectations may be the result of an overall concern about: first, how quickly business conditions have changed and are expected to change; second, the complexity of interrelated issues underpinning the risk landscape; and third, the trend toward increased expectations and transparency regarding environmental, governance and other non-financial matters.
- In relation to our prior year results, while most executives rated fewer specific risk issues as “Significant Impact,” board members increased their “Significant Impact” risks from zero in 2022 to four in 2023.
- There are noticeable differences in views about 2023 risk conditions across executive type. The disparity of perspectives among executives and directors begs for more engagement in conversations with one another to forge a robust view of the organization’s risk profile.
- Overall, the results reflect how different roles offer varying perspectives when assessing risks in disparate environments and over longer versus shorter time horizons. It is of paramount importance that both the board and the management team engage in dialogue regarding the critical enterprise risks, given the different perspectives each brings to the table and the potential for a lack of consensus..
There is marked contrast in perspectives across various executive positions, which suggests there may be significant value in explicitly discussing overall impressions about the risk environment among key leaders, especially at the highest level of the organization. Enterprise risk assessments should benefit from the influx of multiple, diverse perspectives.