Top Risk Management Challenges Faced by Saudi Companies & How to Overcome Them

In today’s dynamic and highly regulated business environment, risk management has become a strategic imperative for Saudi companies. According to a 2024 PwC Middle East survey, 65% of Saudi business leaders identified risk governance as a top concern impacting operational resilience.

From shifting regulatory landscapes to cybersecurity threats and financial volatility, organizations across the Kingdom face increasingly complex risks. As Vision 2030 reforms continue to reshape Saudi Arabia’s economy, robust risk management frameworks are not just a compliance requirement—but a competitive advantage.

This blog explores the top risk management challenges in Saudi Arabia and offers practical solutions tailored for local businesses navigating a fast-changing corporate landscape.

Risk management is the process of identifying, assessing, and mitigating potential threats that could disrupt business operations, damage reputation, or result in financial loss. It includes strategic, operational, financial, and compliance-related risks.

A comprehensive risk management framework involves:

• Risk identification
• Risk analysis and prioritization
• Control implementation
• Continuous monitoring and reporting

In Saudi Arabia, this concept is tightly linked with corporate governance, Shariah compliance, and regulatory adherence, making it essential for decision-makers to align risk management with business objectives.

Saudi businesses operate in a unique and evolving ecosystem. Here’s why risk management is critical:

1. Regulatory Pressures Are Rising

With the Saudi Capital Market Authority (CMA) and the Ministry of Commerce strengthening enforcement, businesses are expected to follow strict governance and compliance frameworks.

2. Economic Diversification Demands Stability

As the Kingdom diversifies under Vision 2030, organizations must ensure sustainable risk management in unfamiliar sectors like tech, tourism, and clean energy.

3. Increased Cyber Threats

Saudi Arabia ranked 7th globally in cyberattack targets in 2023. The move to digital transformation heightens exposure to ransomware, phishing, and data breaches.

4. ESG Expectations and Global Standards

Investors and stakeholders demand environmental, social, and governance (ESG) transparency. Poor risk practices can result in reputational and legal consequences.

Here’s how Saudi companies can turn risk into opportunity:

1. Establish a Risk Governance Framework

• Align with CMA’s Corporate Governance Regulations.
• Define roles for risk committees, audit teams, and compliance officers.
• Conduct annual risk assessments.

2. Invest in Technology

• Use GRC platforms like CG BOD for real-time monitoring, audit trails, and regulatory updates.
• Deploy cybersecurity tools (e.g., threat detection, multi-factor authentication).

3. Foster a Risk-Aware Culture

• Train staff regularly on risk protocols.
• Encourage transparent reporting of near-misses and potential threats.
• Integrate risk KPIs into performance metrics.

4. Conduct Vendor Due Diligence

• Use third-party risk assessment tools.
• Include compliance clauses in contracts.
• Regularly audit vendors for data security and operational reliability.

5. Monitor Regulatory Updates Proactively

• Subscribe to updates from ZATCA, CMA, SAMA, and the Saudi Data & AI Authority.
• Use automated tools to track compliance deadlines.

A leading Riyadh-based family-owned holding company operating in retail, logistics, and real estate faced rising cyber threats and regulatory scrutiny. Using CG BOD’s GRC software, the company:

• Mapped all enterprise risks across subsidiaries.
• Deployed incident response playbooks for cyber incidents.
• Conducted quarterly board-level risk reviews.
• Automated compliance checks for PDPL and CMA filings.

As a result, the company reduced compliance gaps by 70% in 12 months and built stronger investor confidence.

Risk is inevitable, but being unprepared is a choice. Saudi companies must act now to build proactive, tech-enabled, and governance-aligned risk management systems.