The top risks facing directors include economic and cyber risks particularly those associated with data loss and ransomware, said WTW and Clyde & Co recently.
Economic risk was considered the top risk for businesses by 63% of global directors, closely followed by cyber risk at 62%, according to The Directors’ and Officers’ Liability Survey Report, jointly conducted by WTW and law firm Clyde & Co which collected responses from 40 countries around the world.
Among the top risks facing directors, geopolitical risk grew in importance, moving up to 4th place from 6th last year, WTW pointed out.
Overall, the results are consistent with 2022, with cyber, data loss and cyber extortion continuing to dominate the highest ranks of risks for directors, WTW said.
For the first time, the survey broke down economic risk into three perils, inflation, recession and the job market, with most global directors citing inflation as the biggest economic risk (69%), closely followed by recession (67%), WTW added.
Key findings for Asia
In Asia, while cyber risk continues to be the top risk for Directors, there is an increase in risk ranking of regulatory breaches, and health and safety prosecutions, WTW said.
Bribery and corruption ranks amongst the top five risks in Asia with 57% respondents indicating it as a key risk, the firm added.
The trends in Asia are consistent with global trends where economic uncertainty and cyber issues continue to be key concerns for directors, said Namit Mahajan, Head of FINEX (Financial & Executive Risks) Asia, WTW.
With a volatile business environment resulting from the current geopolitical uncertainty, it’s no surprise that geopolitical risk is also rising on the list of directors’ concerns on business operations, Mahajan noted.
In addition, regulatory and legislative changes continue to be a key concern for directors, he observed.
In recent years, there has been heightened scrutiny by more proactive regulators, with a continued focus on tackling financial crime and market abuse, improving consumer protection, as well as having an increasing emphasis on ESG, including climate related risks, he added.
While climate change may not be ranked amongst the top five risks in Asia this year, it is certainly still a rising concern for directors in this region, WTW said.
