There has been a dramatic increase in political risks according to a new study carried out by Sword Active Risk, and this has largely been attributed to the outcome of the UK Brexit vote and the US Presidential election.
In the UK, 44% of organizations cited the political situation, and subsequent implications, as the biggest potential challenge or unknown to their business, in stark contrast to last year when supply chain and cyber security were the most significant risks being faced by companies. In the US, this year a third of companies saw the domestic political situation and supply chain as the biggest risk, when last year it was geopolitical, and physical/construction risks that were seen as more important.
Keith Ricketts, Vice President of Marketing at Sword Active Risk commented; “While both of these events were on the horizon last year, no one predicted that they would turn out quite as they have done, with the UK voting to leave the EU, and Donald Trump becoming US President. After the financial challenges of 2008 and the global recession, there was a feeling that many markets were getting back to a more even keel. This is a stark reminder that unexpected events beyond the control of companies can come out of the blue and have a dramatic impact.”
Political change featured as an emerging trend in the latest edition of the Business Continuity Institute's Horizon Scan Report, with 42% of respondents to a global survey identifying it as something for business continuity professionals to watch out for. However, this report was published prior to either of these events occurring so it will be interesting to see where it features in the 2017 report, the survey for which is currently live.