ESG disclosures are a particular concern, with 40% of respondents challenged by the standardization and management of data according to ESG frameworks
NEW YORK–(BUSINESS WIRE)–Regulatory compliance is a top risk for businesses in 2023, with 73% of risk professionals concerned about meeting the demands of regulations, according to new research from Diligent, the global leader in modern governance providing SaaS solutions across governance, risk, compliance, audit and ESG. The U.S. survey of 450 senior risk, compliance, audit, finance and security professionals gives new insights into what leaders view as being the top risks for their organizations in 2023.
“These results confirm what we are hearing from our customers that today’s organizations are faced with an incredibly diverse set of risks, from regulatory compliance and ESG measurement and reporting to cyber security and risks resulting from working from home,” said Brian Stafford, CEO of Diligent. “Being able to connect risks from across the organization, have a connected view of both opportunities and risks, and easily report them up to the board is crucial to help leaders make better decisions, faster.”
Top risks that emerged include energy price and supply (17%), talent recruitment and retention (16%), cyber/data security and ESG (15% each.) Other notable trends include:
82% of respondents believe insufficient data is the biggest problem when it comes to communicating risk to the board:
- 82% of respondents do not feel very confident in their ability to clearly communicate risk to the board. The greatest barriers they face are insufficient data to see what’s around the corner (35%), multiple risk methodologies being used across the business (34%) and ineffective methods of interpreting the data (30%).
- The most common risks currently discussed at board meetings are ESG (17%), cyber/ data security, (17%); and not keeping pace with digitalization, new technology and AI (16%).
49% of organizations have experienced a cyber breach this year, resulting in an average of nearly one million per organization in lost revenue:
- 32% said the Internet of Things (IoT) device vulnerability has been the greatest cause of cyber attacks. Mobile security attacks (30%), remote working vulnerabilities (30%), social engineering (28%) and identity-based cloud security threats (28%) were also top causes.
- 76% feel prepared for risks associated with Web3. Despite this, 40% have not yet started to incorporate Web3 into their long-term risk strategy.
73% of risk professionals surveyed are concerned about meeting the demands of regulatory compliance, particularly as it relates to ESG:
- 42% believe analysis and embedding of ESG data into the organization’s overall risk strategy and the standardization and management of such data according to various ESG frameworks.
- 50% of Risk and compliance professionals surveyed are over twice as likely to say ESG oversight will play a bigger part in their role in 2023
61% of risk and compliance professionals said they are expecting a recession in the near future with 18% identifying work-from-home as the greater macro social, political and economic risk.
Diligent’s platform enables organizations to apply an integrated risk management approach to gain a complete view of their risk posture and prioritize and respond to the highest risk areas. Built-in dashboards and customizable reporting allow risk professionals to access meaningful insights and provide the board and executives with the knowledge to make data-driven decisions with confidence.
Read more about new risks and emerging opportunities in 2023 here.
About the report
Diligent partnered with Censuswide to survey 450 senior risk, compliance, finance, audit and security professionals based in the US, aged 18+ and in companies with 100 or more employees, between 09.11.22 – 17.11.22. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.
Diligent is the global leader in modern governance, providing SaaS solutions across governance, risk, compliance, audit and ESG. Serving more than 1 million users from over 25,000 customers around the world, we empower transformational leaders with software, insights and confidence to drive greater impact and lead with purpose. Learn more at diligent.com.
Senior Communications Manager, Diligent