Lloyd’s Chief Executive, Richard Ward, said: “Two years ago, businesses told us they were primarily concerned about the cost and supply of credit. Now, their worries are even more fundamental, with many wondering just what has happened to their customers, and where they can find the skilled staff they so desperately need. The survey is a snapshot of two years of economic uncertainty.”

He added, “We have gone from a credit crunch to a talent crunch, despite the unemployment picture. CEOs feel they are lacking people with specific skills, but they are also concerned about having leaders and managers who can help them navigate the difficult global business environment. Extraordinary conditions require exceptional leaders.”

Indeed, ‘boosting talent retention’ was named in the survey as one of the most effective risk management actions taken by management over the last three years.

In 2011, the top five risks were:

- Loss of customers/cancelled orders

- Talent and skills shortages

- Reputational risk

- Currency fluctuation

- Changing legislation

Despite the series of major natural catastrophes across the globe in 2011, business leaders placed ‘natural hazard’ risks—ranging from flooding to earthquakes—in the bottom ten of 50 corporate risks. On a positive note, the majority (70%) of business leaders feel better prepared to cope with most of the risks they face compared with two years ago.

The 2011 risk perceptions of business leaders are very different from those in the inaugural survey in 2009, in which the top three global risks were related to the liquidity crisis: cost and availability of credit, currency fluctuations and insolvency.

Richard Ward added: “On the one hand, it’s reassuring to see growing awareness and understanding of the fast moving, unpredictable risks facing global businesses. But business leaders must plan for and take action to address not only likely scenarios, but those rare and hard to predict events that form part of this complex, modern risk landscape.”

On the issue of the management of risk, Lloyd’s said: “When respondents were asked to identify the most effective risk management action their organisation had taken over the last three years, they cited the introduction of formal risk management strategies and systems. Risk management is now one of the most important roles in the business community.”

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