Decision-makers are ‘paralysed’ by crises, warns BDO report

In response, executives are taking a much more defensive approach, with more than two thirds (69 per cent) saying their companies are either ‘risk averse’ or ‘risk minimising’, a rise from 61 per cent last year.

Only 7 per cent of executives said their risk management was ‘very proactive’, down from 19 per cent in 2024 and 29 per cent 2023.

The report found that top six risks keeping business leaders up at night were regulatory risk, concerns over supply chains, recruiting and retaining talent, geopolitical tensions, environmental issues and cybercrime.

While regulators are demanding ever-more information about risks, some executives (39 per cent) agreed that this had a positive impact in helping to make companies safer, but a larger proportion (57 per cent) said regulatory demands were only ‘somewhat’ helpful in reducing company risk profiles.

However, CEOs surveyed were critical of compliance overspend, suggesting that current risk management strategies are failing to deliver value.

Alisa Voznaya, partner and head of risk consulting at BDO said: “The risk landscape for businesses has been in flux for more than a decade and shows no sign of stabilising.

“Faced with this relentless volatility, some business leaders are being too hesitant to take decisions and paralysed by the fear of what could go wrong. But this safety-first approach means businesses are missing out on opportunities and limiting their growth prospects.

“Part of the problem is that businesses are increasingly taking a compliance-led approach to risk, with a box-ticking mentality distracting from the management of actual risks.

“Many would do well to adopt a more proactive approach, engaging in regular scenario planning and anticipating the things that could go wrong so they can start to identify opportunities.

"Businesses shouldn’t lose sight of the fact that there can be competitive gains to be made from responding positively to challenging circumstances."

For its report, BDO surveyed 500 executives in global businesses with more than $100m in revenue across a range of industries including financial services, power and utilities, healthcare and life sciences, manufacturing and private equity.

BDO LLP operates in 18 offices across the UK, employing 8,000 people. It has UK revenues of £1bn.

It provides audit, tax, deals and consulting, risk and outsourcing services predominantly to mid-sized, businesses. BDO LLP is the UK member firm of the BDO international network, which provides business advisory services in 166 countries and territories, with more than 119,000 people working out of 1,800 offices worldwide. It has revenues of US$15bn.