Effective risk management is essential for ensuring long-term success and stability in today’s dynamic landscape. Companies face diverse challenges that can jeopardise their operations, financial health, and reputation. The 2025 global risks study by the World Economic Forum (WEF) reveals that 52% of respondents foresee an unsettled global outlook in the next two years, 31% anticipate turbulence, and 5% predict a stormy scenario, indicating a significant rise in pessimism and expectations of instability into 2027 [1].

Operations disruptions, financial fluctuations, reputational damage, and geopolitical tensions further add further risk to the compliance landscape. Hiring mistakes can have significant impacts, making robust background checks and a comprehensive risk management framework essential for business resilience. Is your business ready with a risk management framework to manage these risks?

1. Geopolitical risks

Geopolitical risk tops WEF’s 2025 list, with 23% citing it as the primary threat [1]. A decade of rising armed conflicts drives national security to the forefront of government agendas. Geopolitical risks can significantly impact supply chains, as political instability, trade disputes, and international sanctions disrupt the flow of goods and materials across borders.

The ongoing conflict between Russia and Ukraine serves as a stark example of such disruptions. The war has severely affected global supply chains, particularly in sectors reliant on key exports like grain and energy. For instance, companies worldwide have faced shortages and price increases for agricultural products due to the blockade of Ukrainian ports and the destruction of infrastructure. Additionally, disruptions in energy supplies from Russia have led to increased costs and supply uncertainties for industries dependent on natural gas and oil.

2. Extreme weather events

Climate change-related vulnerabilities remain high on WEF’s list for 2025. In the summer of 2025, a heatwave in Western Europe caused extremely low water levels on the Rhine. As a result, the capacity of cargo ships at Kaub was reduced to about 50%, and at Duisburg and Cologne to 40–50% [2]. Shipping companies responded by imposing surcharges on transport costs, significantly increasing the financial burden on shippers. This could get worse by 2026, with an expected loss of US$24.5 trillion due to weather-related losses [3].

3. Security and cyber incident risks

In today’s digital landscape, security and cyber incidents pose significant risks that businesses must vigilantly address. As companies increasingly rely on technology to operate and store sensitive information, they become prime targets for cybercriminals. In November 2025, a zero-day vulnerability in Google Chrome prompted an emergency update for over 2 billion users, underscoring how quickly cyber risks can escalate globally [4]. Security breaches can result in unauthorised access to confidential data, financial losses, and damage to a company’s reputation. Cyber incidents, such as ransomware attacks, phishing schemes, and data leaks not only disrupt operations, but can also lead to severe regulatory fines and legal repercussions.

4. Compliance risks

How familiar are you with the laws and regulations that apply to your business? Compliance can be tricky for many reasons. Compliance risks represent a critical challenge for businesses operating in today’s highly regulated environment. Failure to adhere to industry regulations, data protection laws, and corporate governance standards can have significant legal and financial consequences. Non-compliance may lead to hefty fines, legal battles, and damage to a company’s credibility.

Recently, the Ministry of Manpower (MOM) in Singapore introduced the Complementary Assessment Framework (COMPASS), which requires employers to offer clear career development pathways for foreign employees. This underscores the importance of businesses understanding and navigating these evolving regulations. To mitigate compliance risks related to COMPASS, it is crucial to implement robust employment verification strategies, including thorough background screening and employment history checks, ensuring adherence to current and new regulatory requirements.

5. Financial or economic risks

Financial or economic risk is closely related to business profits, so investors and shareholders often scrutinise it. Financial risks are caused by multiple factors, such as market movements, foreign currency exchange rates, commodity price fluctuations, etc. Strategies to mitigate financial or economic risk usually aim to ease cash flow issues, and common tactics include getting insurance, diversifying income streams, and limiting the amount or tenure of loans.

6. Reputational risks

Reputational risks involve the potential damage to a company’s public image and brand value, which can arise from various incidents, including unethical breaches, product failures, or poor customer service. Social media exacerbates this risk by amplifying the impact of any negative event. For instance, in 2017, United Airlines faced a severe reputational crisis when a video of a passenger being forcibly removed from an overbooked flight went viral. This incident led to widespread media condemnation and public outrage, significantly damaging the airline’s reputation, costing the airline $1.4 billion in a day [5]. In such a highly connected environment, even a single misstep can quickly escalate, underscoring the importance of proactive reputation management.

7. Hiring risks

When hiring, one of the most critical risks businesses will face is the potential for hiring the wrong person, which can lead to significant consequences. A notable example of this risk is the case of a Nanyang Technological University (NTU) dropout who forged a bachelor’s degree in engineering and deceived companies, securing positions in The Walt Disney Company, Marshall Cavendish, and Scholastic Education International.

It is shocking easily to get a fake university degree, a recent investigation by a Singapore news media company reported. Organisations can protect themselves from potential financial losses, reputational damage, and operational disruptions by ensuring candidates’ authenticity and qualifications.

How to minimise business risks

To effectively manage risks and ensure long-term stability, organisations must get work towards getting the basics of risk management strategies right. Some essential actions include:

Establish a comprehensive risk management framework that integrates risk identification, assessment, and mitigation processes across all levels of the organisation.

Monitor and review your risk management strategies to adapt to evolving risks and ensure your controls remain effective.

Cultivate a risk-aware culture by promoting clear communication, ongoing training, and accountability among all employees.

Conduct background checks on potential employees.

Understandably, most businesses don’t have the time, know-how, and manpower to dedicate to thorough intelligence gathering in the hiring process. There’s also the grey area of privacy laws to consider – how much is a company allowed to dig into their potential hires or partners? In such cases, trusting a specialist and market leader like RMI to do the legwork for you can be the most cost-effective solution. Contact us to learn more about our solutions.