Directors Risk Survey Report 2018
Two key themes ran through our fourth Directors’ Risk Survey Report – IT and people.
Run by Marsh in conjunction with the Institute of Directors, the results have once again reflected changes in the evolving local and global risk landscapes – with cyber, IT, talent attraction and retention and the loss of a key person just some of the risks highlighted.
In our first Directors’ Risk Survey in 2013, cyber risks were perceived to be an emerging risk – not one that was having an impact on entities on a daily basis. Leap forward five years and cyber is the number one external risk and the number one emerging risk. This is a similar trend that is being experienced globally.
Risks related to IT disruption, such as the loss of data, data corruption or software failure also featured highly within the survey. Data loss in particular is a key issue at the moment with the introduction of the EU Global Data Protection Regulation on 25 May and New Zealand’s Privacy Bill passing its first reading in Parliament. Both have implications for how companies handle personal data.
People are at the forefront of the biggest internal risks facing directors and boards, with the loss of a key person ranked the highest and talent attraction and retention at number five. Talent attraction and retention was also rated the second largest emerging risk.
For many organisations their people are their key competitive differentiator, so making sure that current employees’ needs are met and that there is an environment that is appealing to attract new people is imperative – especially given the growing war for talent.
Other issues highlighted were brand and reputational risk and disruption to a business caused by natural catastrophes. Given the array of different risks and the complexity of the current business environment it is little wonder that 53% of directors said that their board’s involvement in insurance and managing risk had increased over the last 12 months.
The Directors’ Risk Survey, which is designed to gauge directors’ views on a wide range of risk issues, was completed by 570 members of the Institute of Directors across New Zealand.
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