Top Risks 2019: CFOs Focus on People and Technology

Chris Wright, Managing Director Global Leader, Business Performance Improvement Practice

Chief financial officers (CFOs), by virtue of their role as strategic and financial managers and scorekeepers, are in a unique position to view corporate risks across the enterprise. It is therefore useful to understand the concerns behind CFOs’ responses to the latest Top Risk Survey from the N.C. State University Enterprise Risk Management Initiative and Protiviti.

Most CFOs tend to be operationally oriented and focused on their role of keeping the gears of business oiled with cash so that the enterprise engine runs smoothly. As the global economy contracts and expands, the CFO’s primary job is to continue monitoring operations, scanning the road ahead and adjusting to any events that might interfere with the smooth running of that engine. So, although CFOs are necessarily paying attention to changes in the broader economy, macroeconomic issues do not appear to be their primary concern.

A CFO’s perspective on risk is thus different than, say, a board member’s, who might be more concerned with strategic risks and might perceive a more risky environment as a result – a finding borne out in our survey, as well. Whereas a board member’s concerns might be centered on competition, regulation and the economy, and framed by their experiences with other companies on whose boards they serve, CFOs are more likely to be preoccupied with labor availability and cost, operating systems and data security.

Top Five on CFOs’ Minds

Labor is of particular concern, occupying three of the top five CFO risk issues. Uppermost is succession planning in a tightening talent market and the organization’s ability to attract and retain top talent to meet operational targets. This risk is particularly prevalent in major markets, such as New York and Washington, where Amazon recently announced plans to establish new East Coast operational hubs. Competition for scarce labor feeds another top concern: that rising labor costs could affect profitability.

The third “people challenge” highlighted by CFOs is a growing concern that transformative change could be hampered by resistance to making the required operational and process adjustments.

Rounding out the CFOs’ top five risks in our survey are concerns that cyber attacks may disrupt operations and tarnish brand image, and a related concern that the IT infrastructure may be falling short of meeting operational targets and supporting capabilities required to compete with “born digital” competitors.

The Importance of a Unified Vision on Risk

All that said, CFOs reported a lower level of concern, overall, than other executives. This may have to do with the fact that CFOs have broader knowledge of the day-to-day financial realities of their organizations and are able to exercise some control over them. They are also constantly making risk-based financial decisions and are accustomed to addressing risk issues daily, based on their regular exposure and responses to risk events. Even with an eye on the broader economy, CFOs remain focused on specific problems with immediate bottom-line impacts that are likely to be present in both booms and recessions.

The marked stratification of top risk concerns according to the respondent’s role in an organization, noted in our survey, is the natural result of these leaders being attuned to their own nuanced risk subcultures. However, this diversity in risk perception should highlight the importance of bringing these various constituencies together to work collaboratively to achieve consensus so that risk assessment and management efforts can be prioritized and executed in a holistic manner.

My colleagues and I will continue to unpack the survey results in the months ahead and track how the identified risks manifest themselves across various geographies and industries throughout 2019. To stay on top of these analyses, subscribe to our blog. The complete survey report and an executive summary can be downloaded at

Read additional posts related to top risks on The Protiviti View and learn about Protiviti’s risk management services.

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