Top business risks outlook in 2024

The Singapore Exchange (SGX) has specific requirements for enterprise risk management (ERM) for companies listed on its mainboard, Catalist, and SGX-ST platforms.

These requirements are outlined in the SGX Rulebook and aim to ensure that listed companies have robust frameworks in place to identify, assess, and manage risks effectively.

1. Board and Management Responsibility:

The board of directors is ultimately responsible for the governance of risk within the company. This includes determining the nature and extent of acceptable risks, overseeing the risk management framework, and ensuring the implementation of adequate controls.

Management is responsible for developing and implementing the risk management framework, including policies, procedures, and processes, to identify, assess, monitor, and mitigate risks.

2. Risk Management Framework:

Companies are expected to have a formal and documented risk management framework that is proportionate to the size and complexity of their business.

This framework should address various risk categories, including financial, operational, compliance, and information technology risks.

The framework should also consider emerging risks, such as those related to climate change and technological disruption.

3. Disclosure and Transparency:

Companies are required to disclose their approach to risk management in their annual reports. This disclosure should include:

• A description of the principal risks faced by the company and how they are being managed or mitigated.
• An explanation of the company's approach towards identifying, measuring, and monitoring its key and emerging risks.
• Commentary from the board on their oversight of the risk management framework.
• Companies listed on the Catalist platform are subject to additional disclosure requirements related to their internal controls over financial reporting.

As we facilitate the discussions on enterprise risks for companies listed on the SGX for the year end reporting season, we are pleased to summarise the top concerns feedback to us by some of these top business executives regarding the outlook for 2024.

Top 10 business risks to watch out for in 2024

1. Geopolitical risks: The war in Ukraine and other geopolitical tensions are creating uncertainty and instability in the global economy. Businesses need to be aware of these risks and develop strategies to manage them.
2. Technological disruption: New technologies are constantly emerging, and businesses need to be adaptable to keep up. Those that fail to do so could be disrupted by their competitors.
3. Cyber incidents: This includes ransomware attacks, data breaches, and IT disruptions. These can result in significant financial losses, reputational damage, and operational disruption.
4. Business interruption: This can be caused by a variety of factors, such as natural disasters, cyberattacks, and supply chain disruptions. Businesses need to have contingency plans in place to mitigate the impact of these events.
5. Shortage of skilled labour: Many businesses are struggling to find the skilled workers they need. This can lead to higher wages, lower productivity, and difficulty in expanding operations.
6. Changes in legislation and regulation: Businesses need to be aware of changes in legislation and regulation that could impact their operations, such as new environmental regulations or data privacy laws.
7. Sustainability: Businesses are increasingly being expected to operate in a sustainable way. This includes reducing their environmental impact and being socially responsible.
8. Third-party risk: Businesses are often reliant on third-party vendors and suppliers. The failure of a third-party can disrupt a business's operations.
9. Evolving customer expectations: Customers are becoming more demanding and expect businesses to provide them with a seamless and personalised experience.
10. Economic slowdown: The global economy is facing a number of headwinds, such as rising interest rates and inflation. This could lead to a slowdown in economic growth, which could hurt businesses.

Which are the risks most relevant to your organisation and what steps should you take to mitigate those risks and to leverage on the corresponding opportunities?

Reach out to any one of our risks specialists for an in depth discussion on this topic!