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- Published: Mon, Oct 24, 2022 09:35
Aon has released the results of its 2022 Executive Risk Study, “Better Decisions in Uncertain Times.” The research clearly shows that leaders who make better risk decisions are better equipped to thrive in times of great volatility and economic uncertainty.
Aon conducted over 800 interviews with C-suite and senior management at companies with over 500 employees, answering questions such as: How are you making better decisions to position your company for growth during this critical time?
A majority of business leaders (79%) expect a recession this year. A very select group of leaders (only 35%) report feeling prepared for this downturn.
Aon’s CEO, Greg Case, said: “This year’s report reveals that leaders who are prepared to weather economic challenges are embracing calculated risk-taking as their engines of growth.”
Business leaders who are well-prepared for a recession share four basic attitudes to preparedness.
Accepting the risk is the only option. Sixty-two percent of the most prepared leaders agree that businesses are more willing to manage risks given the current macroeconomic conditions. For businesses that feel well prepared for a recession, dealing with risk is not an option, it’s a matter of survival.
Analysis and advice from internal and external stakeholders is essential to making better decisions. Well-prepared leaders are almost twice as likely to say they value the advice of external advisors to improve their company’s ability to make better decisions and manage risks. Confident leaders also resist the urge to slow hiring despite difficult economic times. In fact, 42% of his highly-prepared leaders spend most of their time on the problem of attracting and retaining top-level talent, compared to just 22% of other leaders.
COVID-19 shows that risks are interconnected. 61% of highly prepared leaders agree that risks are interconnected based on their experience during the COVID-19 pandemic. The majority of prepared leaders (73%) strongly believe the pandemic has prepared them to respond quickly to new risks, boosting their confidence as they head into recession.
Don’t put the brakes on your long-term investments or ignore long-tail risks. Inflation, financial crises, energy supply, cyber-attacks and supply chain disruptions are the top five risks that all business leaders say matter most. In addition to addressing these risks, well-prepared leaders are forward-looking and address other long-term challenges such as economic/social inequalities, disruptive technologies, cryptography, and blockchain. Similarly, about half (49%) of well-prepared leaders spend more time on climate change, compared to just a few 26%.
“Climate risk is a certainty, not a probability, and severe weather is becoming more and more a part of everyday life,” Case added. “What this research shows is that climate change can be one of our greatest challenges as well as one of our greatest opportunities. For example: More and more businesses are turning their attention to the challenges posed by climate change, going beyond regulatory compliance and reputation management and delving into the associated risks whose impacts are immediate and measurable – business disruption, material Shortages, supply chain problems, reputational damage…and leaders who invest more time and resources as a result will be ready for the challenge.”
The survey will be conducted from September 2 to 15, 2022, with 815 executives, partners and senior managers from companies with more than 500 employees in various industries across the United States, Canada, United Kingdom, Germany and France. , and conducted online by respondents in management positions. Italy and Spain.
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