New Risk Survey from North Carolina State University ERM Initiative and Protiviti Finds Regulatory Change Tops List of Risk

New Risk Survey from North Carolina State University ERM Initiative and 
Protiviti Finds Regulatory Change Tops List of Risk Concerns for Companies 
Across Multiple Industries 
Board members and senior executives' concerns about strategic risks show 
largest year-over-year increase, according to study 
MENLO PARK, Calif., Feb. 5, 2014 /CNW/ - Changes in the regulatory environment 
and heightened scrutiny by regulators rank at or near the top of risk concerns 
among corporate leaders regardless of industry, according to Executive 
Perspectives on Top Risks for 2014 www.protiviti.com/TopRisks, a just-released 
survey report by global consulting firm Protiviti (www.protiviti.com) and the 
Enterprise Risk Management (ERM) Initiative at North Carolina State 
University's Poole College of Management www.erm.ncsu.edu. 
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"The pressures created by regulators, plus the potential for major adjustments 
in light of regulatory change, are understandably tremendous concerns and 
present substantial risk. Having to comply with new regulatory requirements 
can dramatically affect the profitability and growth of an organization," said 
Dr. Mark Beasley, Deloitte Professor of ERM and director of the ERM Initiative 
at NC State University. "Even organizations in industries that are less 
heavily regulated can feel the indirect effects of new and changing 
regulations, especially those affecting all types of organizations, on 
profitability and growth." 
This marks the second year in which Protiviti and the NC State ERM Initiative 
conducted their study to identify the top risks on the horizon that are 
driving risk conversations in boardrooms and C-suites. Respondents rated the 
potential impact of each of 22 risks considered in the survey on a scale of 
one to 10, with 10 being the highest impact. Despite a slight decrease in its 
rating year-over-year, regulatory change and heightened scrutiny again ranked 
as the top risk with a rating of 6.4 on the 10-point scale in the current 
survey. Notably, financial services organizations and those in the healthcare 
and life sciences industry group rated this risk substantially higher than the 
average from other industries, with scores of 7.3 and 8.2 respectively. 
Most executives rated the business environment as risky, although improving 
relative to 2013. The 2014 scores for a majority of risks assessed in the 
study are lower than their respective scores in the prior year, suggesting a 
slight improvement in the risk environment. Interestingly, board members 
appear to view the business environment as more risky than does management. By 
contrast, CEOs seem to have the most optimistic views about the risk 
environment. 
"One possible reason for directors perceiving the business environment as 
riskier than management does is that the risks with the highest ratings were 
primarily strategic in nature and many directors tend to focus more on 
strategic rather than operational issues," said Jim DeLoach, a managing 
director with Protiviti. "With respect to CEOs, they tend to focus heavily on 
the strength of markets. The global economy was showing signs of improvement 
during the survey period, which could have had a positive influence on the 
participating CEOs, resulting in a lower assessment of macroeconomic and 
strategic risks." 
The Top Ten Risks 
According to the 374 survey respondents, who included board directors, C-suite 
executives and other top management from companies across a range of 
industries, the top 10 risks that present the greatest concerns this year are: 


      1. Regulatory changes and heightened regulatory scrutiny
      2. Economic conditions restricting growth
      3. Uncertainty surrounding political leadership affecting U.S. and
         international markets
      4. Challenges related to succession-planning and talent
         acquisition/retention
      5. The ability to grow organically through customer acquisition
      6. Cyber threats that have the potential to disrupt core operations
         significantly
      7. Resistance to change restricting necessary adjustments to the
         business model and core operations
      8. Privacy/identity management and information security/system
         protection
      9. Anticipated volatility in global financial markets and currencies
     10. Uncertainty surrounding costs of complying with healthcare reform
         legislation

The survey was conducted in the fourth quarter of 2013. Respondents represent 
both U.S.-based and non-U.S. organizations and public and private companies. 
The report also breaks out survey results by size of company, position and 
industry, and offers implications of the survey results for organizations and 
suggestions of how to respond to these top risks.

"Managing uncertainty across a multitude of business issues continues to be a 
challenge that companies struggle with," said Patrick Scott, Protiviti 
executive vice president, global industry programs. "It's critical that 
organizations continue to prioritize risk management strategies to ensure that 
they are prepared to address emerging issues. These survey results should 
serve as a catalyst for an updated assessment of risks within organizations."

Resources Available: Webinar, Video, Infographic, Podcast and Benchmarking 
Tool The report from Protiviti and NC State Poole College's ERM Initiative, 
Executive Perspectives on Top Risks for 2014, along with an infographic and a 
video of key survey results, is available for complimentary download at 
www.protiviti.com/TopRisks and www.erm.ncsu.edu. A podcast featuring DeLoach 
and Beasley discussing the major findings from the study is available at: 
www.protiviti.com/podcasts.

Additionally, Scott, DeLoach and Beasley will host a one-hour webinar to 
discuss the survey findings on February 11 at 10:00 a.m. PST. To register for 
the free webinar, please visit http://www.protiviti.com/webinars. CPE credit 
will be provided to qualifying participants.

Executives can also compare their views about risks that are likely to affect 
their organizations in 2014 to the survey findings online using Protiviti's 
Benchmarking Tool, available at www.protiviti.com/TopRisks.

About Protiviti Protiviti (www.protiviti.com) is a global consulting firm that 
helps companies solve problems in finance, technology, operations, governance, 
risk and internal audit. Through its network of more than 70 offices in over 
20 countries, Protiviti has served more than 35 percent of FORTUNE 1000® and 
FORTUNE Global 500® companies. The firm also works with smaller, growing 
companies, including those looking to go public, as well as with government 
agencies.

Protiviti is a wholly owned subsidiary of Robert Half (NYSE: RHI). Founded in 
1948, Robert Half is a member of the S&P 500 index.

About the North Carolina State University ERM Initiative The Enterprise Risk 
Management (ERM) Initiative in the NC State University Poole College of 
Management provides thought leadership about ERM practices and their 
integration with strategy and corporate governance. Faculty in the ERM 
Initiative frequently work with boards of directors and senior management 
teams, helping them to link ERM to strategy and governance, host executive 
workshops and educational training sessions, and to issue research and thought 
papers on practical approaches to implementing more effective risk oversight 
techniques (www.erm.ncsu.edu).

Protiviti is not licensed or registered as a public accounting firm and does 
not issue opinions on financial statements or offer attestation services.

Editor's note: photos and an infographic (in JPEG or PDF) are available upon 
request.



SOURCE  Protiviti 
Kathy Keller, +1-650-234-6252, kathy.keller@protiviti.com 
http://www.protiviti.com 
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