As we started 2023, I explained the summary of business risks after Protiviti surveyed 1300 C-Suite executives from various industries. The respondents rank 38 risks from 1 to 10 on the severity and magnitude of the risks. At that time, the top three risks were regarding talent, culture requiring agility, and the resistance to change to make necessary adjustments to business models/operations. I am pleased to say that the fatigue that was in the zeitgeist at the beginning of 2023 occurred while the equity markets soared and provided a great return for those of us who invested in the marketplace. Most executives would consider an excellent year if the company shares increased by 10%. At the end of 2023, the S&P 500 rose 23% and the NASDAQ composite rose 38%.
In 2024, while talent is still a top concern, the number one identified risk is economic conditions, including inflationary pressures. I think that people wonder if the good news with a soft landing of the recession and the anticipated interest rate reductions can continue. But many companies learned to manage inflation in 2023 and will have to do so again this year. There are many things we can control in business but managing pervasive systemic expenses (think fuel costs) and building revenues takes longer to manage than other variables. In addition, three other risks must be managed that are less predictable: Cyber threats, third-party risks and heightened regulatory changes and scrutiny. Expect rapid speed of disruptive innovations so pay attention to new and emerging technologies.