Organizations that fail to embrace this disruption face an uncertain future — and may even find themselves obsolete. Many of the biggest changes of the digital age can have both upsides and downsides: opportunities that need to be embraced and dangers that need to be avoided.
Navigating between these two poles of disruptive change is something companies have always needed to do. But now, in an era where the world is more volatile — politically, economically, technologically, environmentally and demographically — we need to rethink the organizational culture, the mindset with which risk is considered and how the risk function itself operates.
A new risk mindset for the transformative age
The digital age presents opportunities for immense value creation. Taking advantage of this shift will mean a sea change in the way we think about doing business — both in terms of how value is created and how the attendant risk is managed, whether that means avoiding it or capitalizing on it.
At the spearhead of this paradigm shift will be a reimagined risk function: a unit that can enable the organizational agility needed to embrace risk, promote a more predictive risk approach, and harness new technologies and risk ecosystems to drive improved outcomes and lower costs without losing the independent perspective that is so important to managing risk.
But the biggest risk is moving too slow — or doing nothing at all at a time when the velocity of risk is higher than ever. This will not only make you more vulnerable to both current and future risks, but also lose the trust of shareholders, staff and customers, and see competitors overtake you.
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EY legal contacts:
Peter Katko – Global Digital Law Leader
Fabrice Naftalski – Global Data Privacy Law Leader
Stefan Krueger – EY Head of Digital Law