Where there isn’t a specialist role, in most cases, responsibility for managing risks falls to the CEO despite them not having the required knowledge for this highly skilled role. Although the majority of businesses don’t employ a risk specialist, seven in ten (70%) business leaders believe that taking calculated risks is empowering, fundamental to sustained growth, and should form an integral part of growth planning.
A similar number of (71%) businesses’ acknowledge that they need to become more agile about how they assess risk, yet the reality is that with UK companies so underweight in risk and compliance experience they lack both the skills and mind-set to assess and respond to evolving risks.
Commenting on the findings, Carol Richmond, Chief Risk Officer, Gallagher, said: “At a time when technological change, rapid digital adoption and a whole host of other risks are presenting new and complex challenges to UK businesses, many organisations don’t have the specialist knowledge to identify what these emerging risks could mean for their business and are relying on CEOs to make significant risk decisions.
"It’s not simply about identifying risks facing the business. A key part of what a risk specialist will do is identify risk issues that should be prioritised. All businesses deal with risks on a regular basis, but it’s as important to have the knowledge to understand those that can be a game changer for the business either in a positive or negative way.
“A lack of robust risk management and identification can greatly undermine the achievement of strategic goals, and with the current lack of risk management skills in many businesses, it raises questions about the capacity of some of the UK’s senior leaders to take a strategic view.
“UK companies must ensure they equip their teams to face the future with confidence – and control – of emerging threats and opportunities.”
With three quarters (75%) of business leaders identifying loss of reputation as a growing risk to their company, it is now more important than ever that they are able to map out where these risks sit within the business, how to mitigate them, and also what crisis protocols are in place should a serious threat emerge. This could be anything from who has control and access to a company's social media channels to the influencers they engage with or the integrity of their supply chain and cyber security.
UK businesses are facing a myriad of short, mid and longer-term risks. Today, UK business leaders are most concerned about the impact of cyber-attacks on their company but believe a shortage in skilled workers is going to be the biggest driver of change over the next five years. Over the next decade, however, seven in ten companies (70%) believe that regulation, policy and consumer behavioural shifts driven by Environmental, Social and Governance (ESG) factors is most likely to disrupt and impact businesses.
Despite Brexit and numerous other macroeconomic headwinds, UK businesses remain optimistic about the future. Four in five business leaders (80%) see opportunities for growth and expansion outweighing risks over the next five years and anticipate having the ability to commit significant capital expenditure to investment in technology.
Carol Richmond said: “Amid current political and economic uncertainty, it is easy to lose perspective on the much broader spectrum of risks facing UK companies beyond legislative and regulatory change, including cyber-attacks, skills shortages, emerging technologies, climate change and loss of reputation. In the age of social media which gives more power to the consumer than ever before, it is important that companies have responsible environmental policies, are socially aware and provide good governance.
“At Gallagher we work with organisations to help them better understand the risks facing their business and identify both the gaps and growth opportunities they present. Risk is not just a negative disruptive force, but an integral driver behind innovation and growth.”