Operational Risk Management
Operational Risk Management

CEOs Value Flexibility as Normality (Haltingly) Returns

As many countries finally turn the corner after 2020, the attention of companies is moving towards what happens next, to understand where their priorities lie, and where they best place their investments.

A recent survey from KPMG begins to shed some light on these issues, from the perspective of the 500 CEOs it interviewed in early 2021. Its headline ‘No Return to Normal in the Near Term’ gives a good sense of the dynamics facing business leaders.

Those dynamics are clearly diverse. 31% of those responding believed their business would return to normal in 2021, with 45% believing it would do so in 2022. 24% felt their business had changed forever. While providing a snapshot of the views of a subset of CEOs, these themes will be familiar to senior managers in companies of all sizes.

In response to the remarkable situation all businesses faced in 2020, many of the CEOs surveyed recognised that they would need to change the working arrangement of their staff. 17% of the CEOs believed they would need to reduce their office estate. 30% estimated that most of their staff would work remotely 2-3 days a week. Many (61%) also felt that they would build on their digital and collaborative capabilities, to address these changes. 14% indicated they would examine options around shared working spaces to support workplace flexibility for staff.

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While some might argue that these numbers might seem low compared to the expectations of many that have been aired over the last 12 months, clearly much change is being planned for and executed. CEOs will value flexibility over the coming months to deliver these changes.

The survey also explored the risk priorities of the CEOs interviewed, and how the events of 2020 had changed their thinking and their plans. Those surveyed now placed cyber risk as their top priority. Regulatory risk and supply chain risk management also featured in their top 4 risks and were perceived as more significant than in previous CEO surveys.

What does this mean for organizations?

Much of the greater regulatory and audit scrutiny emerging in 2021/22 comes from the staff working from home in 2020/21 and the introduction of widespread hybrid working. The lack of controls in the workarounds highlighted above mean that external scrutiny will focus on these areas for potential issues. Companies are finding ways of identifying and migrating these ad-hoc applications into a corporate environment. Alternatively, they are identifying and capturing these Shadow IT applications as they are and are putting management controls around them using attestation engines that capture the details of an application’s ownership, its business use and value, the change approvals process, the relevant documentation and so forth.

In many ways, supply chain risk management is a mirror of all these issues and can be used to extend some of these capabilities to the supply chain, even as far as the 4th or 5th level. While firms have always recognized the value of their supply chain, 2020 has brought home the vulnerabilities companies can be exposed to from a range of perspectives should a supplier get into difficulties. Proactive notification of issues, and their operational, contractual, or reputational impact can help companies to mitigate issues in their supply chain quickly.  This area is proving a rich topic of conversation for Mitratech and its customers.

31% of those responding believed their business would return to normal in 2021, with 45% believing it would do so in 2022. 24% felt their business had changed forever.

Mitratech Solutions

Mitratech offers a range of powerful, robust, and proven solutions that enhance policy and compliance management, Shadow IT Management, and third-party risk management. Fast to deploy and quick to deliver value, our solutions are helping businesses recover and adapt to the challenges of hybrid working in 2021 and 2022.  Click the banner below to learn more.

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