Since the onset of the global financial crisis in 2008, businesses around the world have faced a barrage of new risk-related challenges.
Media coverage of bankers’ improper behaviour has fuelled a climate of consumer and government distrust stretching beyond financial services. Regulators, politicians, consumers and shareholders are looking for ways to impose increasingly demanding standards on corporate behaviour, spurred on by a range of scandals, from tax avoidance schemes and revelations of corruption and bribery, to horsemeat being sold as beef and exaggerations of the benefits of new drugs.
The macroeconomic environment of recent years, marked by the global financial crisis, fiscal uncertainty in the US and sovereign debt problems in Europe, has also helped to make companies more riskaverse, leading them to swap bold investment decisions for more cautious behaviour and cash hoarding.
The tide is turning, however, with most expecting 2014 to mark a return to growth. Greater corporate confidence should see a return to braver strategic moves, although these, of course, bring their own challenges. In View from the top, The Economist Intelligence Unit (EIU) examines the areas of risk featured at the top of boards’ agendas in the short term; considers to what extent board-level investment in risk management is paying off; and looks at the depth of change required to ensure a more robust approach.