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The top risks for businesses in 2024 have emerged, with new-age threats like cyber attacks and data breaches at the top of the list.
Results from an Aon survey, which gathered input from a number of risk managers and other executives who identified their most pressing business challenges, have been released.
Jennifer Richards, chief executive of Aon in Australia, said: “As leaders look to the future of their businesses in an increasingly volatile world, new and emerging threats are reshaping their views of risk and sharpening the need to make better decisions.”
The survey listed cyber attacks and data breaches as the top concerns for Australian business leaders. This has become a repetitive spot for cyber attacks and data breaches, as they were also the biggest concerns in 2021.
This is a reflection of a deeper global understanding of how prominent threats in cyber space are to businesses and the growing awareness of the cyber threat landscape. A total of 13.6 per cent of respondents reported they suffered a loss in relation to attacks and breaches, which further solidifies its consistency at the top spot.
The rest of the results from the global risk management survey are as follows:
- Cyber attacks/data breach
- Regulatory/legislative changes
- Failure to attract or retain top talent
- Economic slowdown/slow recovery
- Damage to reputation/brand
- Business interruption
- Supply chain or distribution failure
- Workforce shortage
- Major project failure
- Cash flow/Liquidity risk
After placing sixth in 2021, regulatory/legislative changes has moved up and now ranks as the second risk on the list. A key driver for this movement on the list could be the increasing complexity of managing regulatory risk across multiple jurisdictions. In sectors like finance and resources, for example, an organisation’s social license to operate is coming under increased scrutiny and may elevate a range of new risks for leaders in years to come.
In the third spot, failure to attract or retain top talent is also a top focus for Australian business leaders. Shortages in talent, workforce or critical specialised skills can have a number of negative effects on businesses, as the list below displays:
- Can hamper innovation
- Lower competitiveness
- Increase chance of cyber attacks
- Increase regulatory breaches
- Create supply chain issues
- Interrupt business
- Damage reputation
“With cyber risks, regulatory changes and attracting and retaining top talent identified as top risks for businesses today, there is a compelling need to be better prepared,” said Ms Richards.
Climate is an overarching theme throughout this list as it directly impacts three of the top 10 risks, such as business interruption, supply chain/distribution failure, and regulatory/legislative changes. The constant threat and frequency of extreme weather events have a big impact on the risk of business interruption, and the rapidly evolving net zero transformation can have a number of implications for market trends and mandatory climate disclosures across various sectors, making it a prominent theme across the top risks for businesses.
It will be interesting to see how businesses adjust to these risks and the strategies they will employ to combat the possible implications that these risks pose, especially relating to global threats like climate change and the cyber and data landscapes.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
