The greatest strategic challenge facing leading global businesses in 2008 will continue to be regulatory and compliance risks, according to "Strategic Business Risk: 2008 — The Top 10 Risks for Global Business". This is closely followed by global financial shocks, workforce and consumer aging, and the rise of emerging markets.

About this Report:

Risks are inherent in every forward-looking business decision so successful risk management should be an integral part of an organization’s strategy and operations – an important dimension of good management practice.

There has been a great deal of work done in the area of risk management in recent years. Ernst &Young has been engaged in significant global activity to clarify stakeholder perspectives, map management activities and identify leading practice from which all can benefit. Likewise, many companies have invested significant resources globally in risk and compliance initiatives.

Financial risk and regulatory risk have been the focus of much of this effort. In both cases, there are externally determined rules and frameworks with which companies need to comply and emerging best practice guidance on processes and controls that can help. We have worked with many companies who have found that the challenge of compliance can lead to opportunities for performance improvement through improved processes and enhanced communication. Some companies are now looking more closely at their operational risks, prioritizing these and thinking about how they can manage and monitor these in a coordinated way, the result of which can again be opportunities for performance improvement. What is clear is that to gain further business advantage, companies must increasingly look at the extended risk universe, from finance and compliance risk – to operational and finally, strategic risk.

A Different Perspective on Strategic Risk

We decided to explore the area of strategic risk from a different perspective. In collaboration with Oxford Analytica we focused on the strategic risks facing 12 of the world’s most important sectors:asset management, automotive, banking & capital markets, biotechnology, consumer products, insurance, media & entertainment, oil & gas, pharmaceuticals, real estate, telecommunications and utilities. These sector studies served as the primary source for the overall comparative report of our findings.

Download Strategic Business Risk 2008

PDF format, 764KB, 32Pages.

Top 10 Strategic Business Risks

• Regulatory and Compliance Risk
• Global Financial Shocks
• Aging Consumers and Workforce
• Emerging Markets
• Industry Consolidation/Transition
• Energy Shocks
• Execution of Strategic Transactions
• Cost Inflation
• Radical Greening
• Consumer Demand Shifts

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About Ernst &Young:

Ernst &Young, a global leader in professional services, is committed to restoring the public’s trust in professional services firms and in the quality of financial reporting. Its 114,000 people in 140 countries pursue the highest levels of integrity, quality, and professionalism in providing a range of sophisticated services centered on our core competencies of auditing, accounting, tax, transactions, risk and business advisory.

We help organizations achieve their business objectives by delivering a wide range of Risk Advisory Services that are designed to help enhance risk management activities and improve business processes. From our network of member firms around the world, Ernst &Young’s 14,000 risk advisory professionals provide services that help clients assess, improve, and monitor their business risks.

Further information about Ernst &Young and its approach to a variety of business issues can be found at www.ey.com/perspectives. Ernst &Young refers to the global organization of member firms of Ernst &Young Global Limited, each of which is a separate legal entity. Ernst &Young Global Limited does not provide services to clients.

Oxford Analytica

Oxford Analytica is an international consulting firm drawing on over 1,000 senior faculty members at Oxford and other major universities and research institutions around the world.

It acts as a unique bridge between the world of ideas and the world of enterprise. Founded in 1975 by Dr. David R.Young, Oxford Analytica has built an international reputation for seasoned judgement on and analysis of geo-political, macroeconomic and social developments, and their implications for industries and governments worldwide.

Further information about Oxford Analytica can be found at www.oxan.com.

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