Tighter regulation and compliance guidelines pose the biggest risk for businesses this year according to Ernst & Young's third annual Global Business Risk report, taking over from last year's top risk, access to credit, which slid into second spot.
"Our research suggests that the most important business risks for 2010 are concentrated in the areas of regulation and compliance," the report said.
"Many of these threats are related to the aftermath of the global financial crisis. Asset management, banking, and to a lesser extent, insurance are facing a political backlash and regulatory overhaul following the global financial crisis. Oil and gas, real estate and mining and metals are contending with efforts by cash-strapped governments to gain revenues. And public sector organizations must cope with knee-jerk decisions made by political leaders under pressure."
The threat of a slow recovery or double-dip recession was the no. 3 risk, with managing talent rising from seventh place last year to fourth in 2010.
"Baby boomers' retirement is now posing the most worrying threat to skill sets in the labor force. This demographic time bomb is ticking steadily and poses the greatest threat to the engineering sectors such as oil and gas, mining and metals, power and utilities, and automotive because skills are not being replaced in the workforce by new graduate," Ernst & Young noted.
Top Ten Business Risks 2010
1. Regulation and compliance
2. Access to credit
3. Slow recovery or double-dip recession
4. Managing talent
5. Emerging markets
6. Cost cutting
7. Non-traditional entrants
8. Radical greening
9. Social acceptance risk and corporate social responsibility
10. Executing alliances and transactions