Exploring the universe of strategic risk
A South African perspective
The Deloitte Strategic Risk Survey highlights the fact that in today’s risk-filled business environment, it can be hard for executives to have confidence that their plans and strategies will play out as expected, and strategic risk is now, more than ever, a priority for top executives.
Strategic Risk Survey
Managing reputation is now the biggest strategic risk consideration for companies both globally and in South Africa. But South African companies have slightly differing view on other risk factors relative to their global peers while the proliferation of technology and social media may be the influence on how companies manage risk.A central finding of the survey is that 81% of respondents both in South Africa and globally have an explicit focus on managing risk. Moreover, 88% of SA respondents say their company has changed how it manages risk over the past three years, while globally, 94% of respondents say they have.
The findings are based on a global survey of over 530 senior managers and executive respondents. 234 of these are from South Africa while 300 respondents are spread across the Americas, Europe Middle East and the rest of Africa as well as the Asia Pacific region. Just under half, or about 47%, of South African respondents are executives or risk specialists.
Surveyed companies came from all five major industry sectors: From consumer and industrial products to life sciences and healthcare, technology, media and telecommunications (TMT), energy/resources and financial services.
Additional detailed insights were obtained from personal interviews with a select band of executives from across industries and regions.
The report identifies four types of risks that executives have to grapple with: these are strategic risks which affect or are created by a company’s strategy, operational risk which hamper a company’s ability to implement its strategy, financial risk which ranges from financial reporting to credit risk as well as compliance risk, which relates to the legal and compliance framework.
The report also tracks risk identification over time, starting in 2010, moving to the present and looking ahead to 2016. Globally, a company brand and reputation had already emerged as a key risk while SA executives identified customer and market concentration as a key risk then.
South African executives see reputation and economic trends as key risk at present and in 2016 they have identified leadership shortage and succession as future risks, while their global peers see economic trends as being a key risk in three years.