BDO’s Global Risk Landscape Report for 2021 examined the mechanics of decision-making under pressure and with huge uncertainty.
It highlights interesting findings regarding risk-adverse businesses, blame culture, technology and risk management, the future of risk management and positives from the pandemic.
This year’s survey shows that in unprecedented times, having an agile mindset is of the upmost importance. Companies which embraced risk responded better during the pandemic than those who actively avoid it.
The effectiveness of organisations’ internal risk frameworks has been called into question after they were tested to breaking point during the pandemic. The survey found 53% of respondents had a global health crisis on their risk register for 2020. Yet, 90% of all respondents say last year’s event prompted them to re-evaluate their risk framework completely, as they did not anticipate the extent of the pandemic.
Technology has helped many organisations unlock a positive response to the challenges of a global pandemic. The research confirms this view, as 43% of respondents cited inadequate technology as a top-three risk that put extra pressure on them during the pandemic. At the same time, 57% of all respondents saw the acceleration of digital transformation as one of the top three positive changes stimulated by the pandemic.
Despite the upheaval due to COVID-19, companies have found a silver lining in their ability to refocus on Environmental, Social and Governance (ESG) factors. In the survey, 24% of respondents cited “improved environmental credits” as their top positive from COVID-19, and 20% said they had “refocused on social purpose”, which means the top two spots were occupied by ESG factors.
Companies faced many risks in 2020, and the report discovered that businesses need to respond to risks and emerging crises with greater agility and precision than ever before. The results suggest that anticipating and acknowledging major crises helps companies to react quicker.
To find out how BDO can help you with adopting a proactive approach for your busines, contact a member of our Risk and Advisory Team at [email protected].
Download the Global Risk Landscape 2021 report to view a summary of the key findings.