Business decision-makers “paralysed” by volatile risk landscape

In total, 84% of international business leaders surveyed as part of BDO’s annual Global Risk Landscape Report said the global risk landscape is now, more than ever, defined by crisis.

In response, executives are taking a much more defensive approach, with more than two-thirds (69%) suggesting that their companies are either ‘risk averse’ or ‘risk minimising’. That’s a rise from 61% last year.

Only 7% of executives surveyed said that their risk management was ‘very proactive’, which is down from 19% in 2024 and 29% in 2023.

The report finds that the six most prominent risks keeping business leaders awake at night are regulatory risk, supply chain risk, recruiting and retaining talent, geopolitical tensions, environmental issues and cyber crime.

While regulators are demanding ever-more information about risks, some executives (39%) agreed that this exerted a positive impact in helping to make companies safer, but a larger proportion (57%) said regulatory demands were only ‘somewhat’ helpful in reducing company risk profiles.

However, those CEOs surveyed were critical of compliance overspend, suggesting that current risk management strategies are failing to deliver value.

Relentless volatility

Alisa Voznaya, partner and head of risk consulting at BDO, said: “The risk landscape for businesses has been in flux for more than a decade and shows no sign of stabilising. Faced with this relentless volatility, some business leaders are being too hesitant to take decisions and paralysed by the fear of what could go wrong. This safety-first approach means businesses are missing out on opportunities and limiting their growth prospects.”

Voznaya continued: “Part of the problem is that businesses are increasingly adopting a compliance-led approach towards risk, with a box-ticking mentality distracting from the management of actual risks. Many would do well to adopt a more proactive approach, engaging in regular scenario planning and anticipating the things that could go wrong so they can start to identify opportunities.”

Further, Voznaya observed: “Businesses should not lose sight of the fact that there can be competitive gains to be made from responding positively to challenging circumstances.”

For the purposes of its report, BDO surveyed 500 C-Suite executives in global businesses with over £74 million in revenue across a range of industries including financial services, power and the utilities, healthcare, life sciences, manufacturing and private equity.