Global Risks to Consider and Recent Analysis by Lloyd's- Has Your Company Considered These?

Evaluating risk is critical for any company and industry, and it is a necessary component in any Strategic and Business Plan. Of course, if CEOs and Senior Managers are looking at acquisitions and investments, there are additional kinds of risks that need to be identified, evaluated, determined, and compared to the internal hurdle rate required/desired by the company. Some of these risks are:

    Country (political and financial)

    Industry

    Company

    Competitor

    Geographical (likelihood of hurricanes, typhoons, tsunamis and earthquakes)

    GeoPolitical

    Terrorist

    Utility Interruption

    Cyber

    Environmental

    Global

Lloyd's recently identified various risks in 2011, which have changed significantly from 2009. In 2009 the top risks were: the cost of credit, currency fluctuation (which has moved down to number 4) and insolvency.

In 2011, on a global basis, they have now ranked the areas as:

1) Loss of Customers (because of economic contractions and dwindling number of companies),

2) Talent and Skills Shortages,

3) Company’s Reputational Risk,

4) Currency Fluctuations

5) Changing Legislation

Talent, in particular, is a surprising find given the high unemployment rates around the World. As a result, the link to the entire study is below, as well as including the specific portion on Talent and Skills Shortages which is include below.

To not consider many of these risks, if not all of them, could lead to a major folly. Has your company evaluated and considered these on a regular basis? If not, why not? If nothing else, it leads to thoughtful ruminations, but hopefully much more than that!

"2. Talent and skills shortages

Talent and skills shortages

The prioritisation of ‘talent and skills shortages’ as the second most important risk facing businesses - and one of only two risks respondents felt insufficiently prepared for - begs many questions.
In a time of business mergers and record unemployment, the pool of surplus talent should, in theory, be significant. And yet, at the very top of organisations, there is huge anxiety about the suitability of available staff for the roles required.
Concern over talent or skills shortages could be due to a number of factors, some of which are discussed in the Index. Respondents across all sectors agree this is a significant and widespread problem.
The resulting business risks could include everything from poor product development to inappropriate risk management strategies.
Many sectors are waking up to the risk and taking action. Some companies, for example, are undertaking audits to identify staff at risk of being poached and targeting packages accordingly.
But prevention is just part of the solution and many industries are investing in processes to identify and train the talent they need from scratch."

Risks - Then and now: what has changed?