The firm’s annual risk report found that business leaders are facing almost permanent disruption, with 84% of respondents to its survey said that the global risk landscape is now more defined by crisis than at any time in recent history.

However, the report found that while there has been a tendency among business leaders to look at risk in a negative way as a threat to be minimised, there can be competitive gains to be made from responding positively to challenging circumstances.

BDO’s survey of 500 business leaders found evidence of a rapidly changing risk environment facing businesses globally.

Compared to the previous year, regulatory risk climbed 13 places to the number one spot in the league table of identified global risks, with 37% of respondents flagging it as a major concern compared to just 7% last year. This may be due to anxieties around the impact of elections in major economies taking place this year.

Supply chain risk edged up one place to take the second spot, most likely a response to the impact of shipping route disruption in the Gulf of Aden and economic uncertainty and inflation. Meanwhile, geopolitical tensions rose three places to joint third, with Russia’s ongoing war in Ukraine and conflict in the Middle East being top of mind.

Cyber risk – the second biggest risk highlighted in 2023, dropped to fifth place in 2024, while environmental risk also dropped down the league table to ninth, underlining how quickly risk priorities can shift against a backdrop of constant disruption.

The survey also found that business leaders have become less optimistic about the opportunities of AI. While three in five respondents (59%) said that they see AI as an opportunity, this is down from 83% recorded last year. This may reflect a growing pragmatism after a year of separating hype from reality.

Tim Foster, BDO’s head of risk advisory services, said: “Set against the backdrop of constant disruption, it’s clear that business risk priorities are shifting quickly and significantly.

“While all organisations need to be alive to the risks they face, they also need to be nimble enough to respond in a way that keeps their business moving forward.

“Our research suggests the risk appetite among businesses has been dented following a period of sustained disruption. However, businesses that change their mindset and lean into the risks they face can often become more resilient and thrive when exposed to stress.”