Cape Town - CEOs around the world regard terrorism as the second biggest threat to their businesses, according to a report by PwC.
In one year, terrorism moved from outside the main focus to the second spot in the top 10 threats listed by CEOs. Terrorism was found to be a top five "extreme concern" in every region except in Africa.
Over-regulation remains the top threat, according to the report. Geopolitical uncertainty was found to be the third highest threat, followed by cyber threats, availability of key skills, speed of technological change, increasing tax burden, populism, climate change and environmental damage and exchange rate volatility.
The Annual Global CEO Report was compiled from 1 293 global interviews with CEOs in 85 countries during the fourth quarter of 2017.
"Looking across the top 10 threat lists of all seven regions, ‘geopolitical uncertainty’, ‘over-regulation’, and ‘increasing tax burden’ are the three that appear on every region’s radar. ‘Availability of key skills’ and ‘speed of technological change’ appear on every list except those of Latin America and Africa, respectively," the report states.
There seems to be a general sense of unease among CEOs about broader threats to society like terrorism and geopolitical uncertainty. They seem to be more worried about these than about immediate business challenges such as availability of key skills, populism and an increasing tax burden.
According to Jared Higgins, CEO of protective and risk consulting firm Arcfyre Group, there are very few regions in the world that are exempt from terrorism, geopolitical uncertainty and unrest.
"The reality is that the world is a global village and the growth and sustainability of businesses depend on this inter- and intra-border trade," said Higgins.
"I think the PwC report reflects that CEOs around the world have now all reached this space in terms of how seriously they take physical threats to their staff, organisations, business and the economies where they operate. Ultimately companies are global citizens and their longevity is under threat in this era of heightened global tension.”
Employees of multinational companies are also often seen as high-value targets by terrorists seeking to extort money to fund their activities.
He explains that social unrest and terrorism threats do not come in a one-size-fits-all model.
A Middle Eastern or African country may face kidnap and suicide bombing threats whereas North America and Europe face crowd immersive threats such as vehicles rammed into crowds.
"In many instances much of the anxiety (of CEOs) can be alleviated if the organisation follows a proper risk mitigation strategy and takes responsibility for the due diligence that should be carried out," explained Higgins.
“Having a clearly defined risk and crisis management plan for both domestic regions and international branches is no longer a luxury but a fundamental requirement.”
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
