The Great Decentralisation: A Decade of Crisis Reshapes Risk Management

A decade of crisis reshapes risk management

After years of a global risk landscape rocked by conflict and uncertainty, businesses are learning that true resilience isn't about fearlessness; it's about calculated courage.

Centralised risk management structures, while valuable for maintaining overall strategy and strategic coherence, may be too slow and inflexible to address this new reality.  

Decentralised risk management allows companies to be cautious overall, while still enabling considered risk-taking in specific areas or markets, providing the flexibility to adapt risk strategies to different business units or geographical regions

Global shockwaves

These events illustrate the interconnectedness of risks. Risk multipliers are where threats in one area amplify vulnerabilities in others – highlighting the need for a networked, interdisciplinary, and agile approach to risk management

Risk management structures are evolving

Companies considering their risk officer for a C-suite position spiked from a low of 29% in 2022 to 45% in 2024.

Companies welcoming risk halved from a high of 15% in 2023 to 7% in 2024, after remaining relatively stable.

While organisations are prioritising the importance of risk management, they may struggle to embrace uncertainty.

The Super Election Year is making an impact  

Unpredictability around policy direction and regulation across major economies is forcing businesses to adopt a ‘wait-and-see’ approach.

But environmental risks are still being taken seriously

As the undeniable impacts of climate change impact businesses, environmental risks are being tackled with increasing proactivity and urgency.

A cyber-economic nexus is emerging  

As companies fortify against direct cyber and financial risks, they may be overlooking the broader economic vulnerabilities in our interlinked digital-financial ecosystem.

Looking forward: The imperative for decentralised risk management

The 'Great Decentralisation' is a call to action. The question isn't whether businesses will face challenges – both known unknowns, and unknown unknowns. It's whether they're equipped to turn those challenges into strategic advantages.