Risky business doesn’t have a seat at many Canadian boardroom tables, and that threatens to further dilute the competitive juices of the country’s enterprise.
According to a recent PwC report, Canadian businesses continue to lag behind their global counterparts in risk management, a shortfall that’s leaving them more vulnerable than their competition to technological change.
“Managing Risk From the Front Line” found that more Canadian companies know they are vulnerable to that disruption but are less successful at dealing with it than competitors in other countries.
PwC notes, for example, that 70% of the Canadian companies surveyed expect to face disruption from technology compared with 55% globally; 49% expect that disruption in human capital compared with 40% of their counterparts globally.
More worrying, however, is the lack of preparation among Canadian companies to deal with major changes. According to the PwC report, only 35% of Canadian business respondents that have faced major disruption generated by digital innovation say they managed the issue effectively. That compares with 42% of global respondents.
Numbers for human capital disruption showed a similar gap in Canadian corporate abilities to deal with it effectively: 24% in this country compared with 36% globally. That weaker risk management in Canadian corporate culture was consistent in every area the PwC report surveyed.
PwC attributed much of that weakness to corporate delegation of risk management to a second- and third-line rather than first-line priority.
That’s a myopic approach in a global economy where competition and disruption are the new normal.
As Danish Ship Finance noted in its 2017 review of shipping industry changes, long-term survival is in the hands of the agile because, while that international sector is notoriously slow at embracing change, digital technology offers its adopters huge value-added opportunities and advantages.
Canada’s corporate culture needs to wake up to that reality now.