Rethinking risk management for today’s interconnected challenges

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The world’s risk landscape is changing in ways that make traditional risk management frameworks feel increasingly inadequate.

Instead of isolated hazards that can be measured, priced, and mitigated by a single business function or department, threats have evolved into a web of interdependent events and trends, ranging from geopolitical friction, climate extremes, technological failure, misinformation and disinformation, and more, that accelerate and amplify one another.

For executives and boards, the implication is stark: preparing for and managing the unexpected is no longer an occasional exercise. Instead, organisations need to build ongoing capabilities that transcend organisational silos and blend intradepartmental efforts.

During this year’s RIMS RISKWORLD 2026, Carolina Klint, Marsh’s Chief Commercial Officer for Europe, Reid Sawyer, Head of Marsh’s Emerging Risks Group, David Arick, Managing Director, Global Risk Management, at Sedgwick, and Franck Baron, Chief Risk Officer for International SOS, discussed how today’s interconnected risks require a focused approach to better identify potential challenges and mitigate their impact or seize opportunities.

A changing risk landscape

As outlined in this year’s Global Risks Report, risks continue to shift over time. Episodic events, such as state-level conflicts, infectious disease outbreaks, critical infrastructure failures and attacks, and misinformation and disinformation waves, move in and out of prominence as does concern around their potential immediate- and longer-term impacts.

This creates a clear problem for organisations wired to focus on what is visible right now. Doing so may leave them exposed to plausible but less visible scenarios whose impacts could be both systemic and compounding as risks stack and exacerbate one another, creating a polycrisis.

For example, an activist attack on infrastructure left a major city without power for days, while supply chain chokepoints in global shipping have resulted from concurrent extreme weather events and political disruptions across multiple geographies.

Integrate information

Risk functions are uniquely positioned to break down silos. Organisations can consider building networks and task forces that aggregate risk signals from across the firm, including operations, IT, and HR. The next integral step is to interpret that data and turn it into meaningful insights for the entire organisation.

Translate complex risk information

Risk leaders can help boards and executives see how risks can affect capital allocation and strategic choices. Doing this effectively requires translating risk concepts into a language that can be understood across the organisation, clearly framing the impact of risk on the balance sheet, and quantifying the value of resilience investments or risk transfer purchasing.

Design effective decision frameworks

As digitalisation and AI use reshape decision-making, risk managers can help define decision architectures, helping senior leaders better understand which processes are appropriate for automation and how to govern rapid, technology-driven choices to minimise the risk of creating systemic vulnerabilities.

5 actions to mitigate risks

As uncertainty persists while existing risks evolve and new ones emerge, senior leaders, including risk managers, have an opportunity to take action aimed at reducing immediate vulnerabilities and building long-term capabilities. This can include:

Organisations should consider moving from ad hoc scenario exercises and instead develop methods to create multi-year risk forecasts, map how exposures might evolve, and quantify the distance between probable and plausible outcomes. These outputs can inform capital allocation, insurance spending, and other risk transfer decisions.

Avoid pigeonholing cyber-related risks as solely an IT problem. Instead, consider technology and AI as potential drivers of enterprise risks that can affect hiring, marketing, and operational systems. Create governance structures that help address evolving and emerging risks.

Efficiency-focused moves, such as offshoring or supply chain concentration, may reduce costs but increase fragility. Risk teams should clearly articulate the trade-offs to executives and boards and make sure that investment decisions consider the potential impact on resiliency.

Organisations need vetted intelligence, internal processes to neutralize bias, and the ability to surface hidden concentration risks, such as those revolving around Tier 2 and Tier 3 suppliers.

Trust can function as a shock absorber. When it is clearly established, regulators, employees, and business partners may give an organisation time to respond when risks affect the business. Focusing on consistent leadership behaviors, clear accountability structures, and transparent narratives can help build trust over time.

Periods of uncertainty are not the exception; they are today’s constant operating environment. For risk professionals, this reality presents an opportunity to enhance their responsibilities and direct their organisations through the strategic changes and investments needed to mitigate and transfer risks as well as the cost of potential impacts. While these actions will not eliminate uncertainty, they can help organisations better identify what risks are plausible, prioritise where to invest, and respond effectively to the next disruption or crisis.

Article

Rethinking risk management for today’s interconnected challenges

The world’s risk landscape is changing in ways that make traditional risk management frameworks feel increasingly inadequate.

A changing risk landscape