With Brexit, fluctuating exchange rates, an uncertain geo-political climate and a series of global cyber-attacks there’s no doubt multinationals have a lot to contend with. But what risks are multinationals most concerned about?
Considering almost half of the multinationals we surveyed for our second Risk and Confidence survey believe the risks that are most likely to increase are technology and cyber, it could be inferred these were major areas of disturbance for multinationals. Yet only 18% of multinational business leaders believe technology risk to concern them the most and even less listed cyber risks.
Risks that are concerning multinationals include:
- Regulation and reputational risk: New and growing exposures in the UK and internationally such as Corporate Manslaughter laws and GDPR means 31% of multinationals believe regulation and reputation risk are set to increase. This is a continuing trend as many multinational business leaders mentioned unpredictable or changing regulations as being of concern to them in our Spring 2017 survey.
- Supply chain risk: Including supplier failure, supplier conduct or quality, supply chain risk is predicted to increase in the next 6 months by 27% of multinationals. There are concerns around partner reliability, particularly along extended supply chains in emerging markets. Furthermore imports and exports are being affected by currency instability, and the doubt surrounding the UK’s place in the Single Market is increasing anxiety around supply chain risk.
- Boardroom/corporate risk: Defined as risk of fraud, corruption, poor governance, weak compliance and pension exposure, 24% of multinationals predict boardroom/corporate risk will increase. Considering these risks are in the hands of multinationals it is interesting so many believe they will increase. This may reflect doubt that multinationals can comply with new regulations and feel exposed.
Hamish McBride, Head of Multinational Claims
Download our Risk and Confidence Survey at http://www.cnahardy.com/pulse