by: Gartner
Identify and act on disruptive trends before they impact your business operations and strategy.
C-suite executives need an efficient way to drive action on emerging risks
Emerging risks — those with the potential to become high-impact, enterprise risks — evolve rapidly. Their elevated uncertainty compared to typical enterprise risks makes it hard for executive leaders to reach consensus and take action before these risks impact the business. However, the longer C-suite waits, the higher the potential losses and costs of future action.
This report, based on findings from Q4 2024, offers an analysis of emerging risks to guide smart decisions. It includes insights from risk management leaders, professionals, auditors and other senior executives. Further, we’ve analyzed the connections between risks, their causes and potential consequences to help executives assess what is most relevant to their organization and stay ahead.
Navigating the ever-changing risk landscape
The rapid and unpredictable development of emerging risks leaves leaders across the enterprise overwhelmed by the sheer volume they must monitor. Simplifying this process requires a top-line perspective that cuts through the noise and focuses on actionable insights that inform strategic decision making and long-term planning. C-suite leaders and boards, examine these top 5 emerging risks from 4Q24.
1. IT vendor criticality
As IT vendors grow and markets mature, customers benefit from cost-efficiencies. However, overreliance on a single vendor or an unknown third party can lead to significant operational risks, such as outages or data loss. For example, many executive leaders were surprised in 2024 by the CrowdStrike outage that left many assets running Microsoft Windows unable to function. Organizations increasingly depend on IT vendors to manage complex products and services, which can leave enterprises exposed. This risk affects operational efficiency, financial planning and strategic partnerships.
2. AI-enhanced malicious code
The risk of AI being able to autonomously deploy malicious code is escalating, potentially leading to an increase in cyber events. Autonomous AI bots have the potential to efficiently scan for enterprise vulnerabilities, which AI automation could then exploit, posing a significant threat to cybersecurity. This is a critical concern for IT and security teams, with implications for business reputation and customer trust.
3. Unsettled regulatory and legal environment
Administrative changes and their ripple effects in key economies may overturn precedents, broadening the range of regulatory possibilities. This creates a dynamic environment where potential increases or reductions in regulatory actions add to the compliance challenges.
4. Postelection volatility
New governments, laws and policies heighten the risk of rapid change. Uncertainty around new agendas and challenges to governmental power around laws or policies can increase volatility both domestically and abroad. This impacts strategic planning and international operations.
5. Soft ransomware targets
Certain IT systems are particularly vulnerable to ransomware attacks, where malicious actors infiltrate an environment, encrypt and exfiltrate files, and demand a ransom. Many such “soft targets” result from organizations being unable or unwilling to upgrade systems, run updates or ensure adequately safe behaviors (e.g., through phishing tests), or from unknown vulnerabilities. These known and unknown vulnerabilities in legacy systems can compromise assets, leading to prolonged disruptions of business operations or compromised data (including customer data) when attacks occur. This risk is critical for IT and cybersecurity teams to address.
Emerging risks FAQs
How can C-suite executives effectively prioritize emerging risks?
In addition to considering emerging risks’ individual and potential impacts, C-suites can examine the strength of relationships between emerging risks and identified, key enterprise risks. This includes risks to corporate strategic goals and objectives.
How can C-suite executives drive faster action on emerging risks?
To drive efficient action on emerging risks, executives can focus their peers on low-cost, immediate strategies to respond to emerging risks — as opposed to precisely defining risk scenarios and associated responses. Many executives prolong decisions on emerging risks until more certainty over their likelihood and impact can be established, but this increases time-to-action, potential risk impacts and response costs. By proposing lower-cost options earlier, executives can begin to generate organizational action.
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Source by: Gartner
