“More than two thousand organisations that we contacted as part of our survey were given an impulse to think about the risks of their operation in a more intensive manner. The most important moment in risk management is becoming aware of the risks. The results show that only a small percentage of Czech companies currently apply a systemic approach to dealing with risks – corporate risk management has been in its infancy in the Czech Republic” says Radovan Škultéty, the Chief Executive Officer of Aon Risk Solutions for the Czech Republic and Slovakia.

Reputational risk which stands at number one in the global study ranks at number ten in the Czech survey. Czech companies see the risks arising from an increase in the administrative burden, fraudulent behaviour of employees or fluctuations in exchange rate as much more pressing. Czech organisations have similar opinion as the foreign companies on cyber attack risk. More than 50% of respondents in the survey mentioned the risk of cyber attack as the most imminent threat. Almost the same percentage of organisations however admit that they did not perform any formal evaluation of cyber risks or the responding manager does not know about it.

Top 10 Risks for 2017

Top 10 most significant corporate risks in the Czech Republic includes the risks arising from the current situation on the labour market and legislative changes also play an important role. The estimate of the importance of these risks for 2020 however implies that there are more concerns about the economic slowdown and instability on commodity markets. Number ten of top ten risks in the three-year outlook is the increasing competition.

Czech managers currently associate most significant financial impacts with workforce shortage, risk of the fluctuation in commodity prices, administrative burden or fluctuation in exchange rates. These fluctuations are dealt with by 8 out of 10 responding companies through various measures. Otherwise, the readiness of Czech companies to deal with various risks is relatively low – it is the typical Czech approach not to deal with causes, only with consequences. More than half of the organisations identify risks during the discussions of the management when risks are evaluated. Only 1 out of 10 companies have their own risk management department.

“Czech managers currently see the most significant risk in workforce shortage. However, in my opinion the most important risk is the fact that they do not deal with their corporate risks in a consistent manner and they often do not know the risks at all” adds Radovan Škultéty.

Top 10 Risks for 2020

The workforce shortage is number one in top ten risks in the outlook for 2020. However, on other positions, the expectations of respondents differ from the current situation. They see future risks primarily in the economic slowdown or cyber-crime. Number ten of top 10 risks for 2020 is increasing competition, which for example in Poland, where a similar qualitative survey has been conducted already for several times, dominates the last two surveys of 2015/2016 and 2017/2018. “As an experienced consultancy in risk management, we are able to provide well tested solutions for a number of risks. In other areas, we are currently developing solutions as the need to deal with such specific risk has not been so pressing until recently” admits Radovan Škultéty.

Top 10 Risks in the Czech Republic at Present and in Three Years (in 2020)

About the Corporate Risk Management Survey in the Czech Republic for 2017

The qualitative Corporate Risk Management Survey in the Czech Republic was conducted for the first time. To provide for the possibility to compare the obtained data to the situation on other world markets, the qualitative survey was based on the structure of the global survey that Aon has conducted for years. Approximately 2,000 companies in the Czech Republic across all industry sectors were asked to provide their responses. The survey was conducted using an on-line questionnaire in October 2017. It was implemented by the market research agency SC&C.