Skip to content

29 January, 2023

Subscribe Advertise About Us
  • My Account
  • Register
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
    • Categories

      • View All
      • Board Moves
    • stakeholder governance

      Threat to stakeholder governance from Twitter sale ‘overstated’

      Academics and experts argue stakeholder governance will always come second while the law puts the...

    • Davos resilience News round-up: this week in governance

      Lessons from Davos; companies risk sliding back on ethical practices; economics affects everyone; Sir John...

    • audit reform UK Audit reform in the UK risks ‘losing momentum’

      The Financial Reporting Council still awaits the proposed new statutory powers that would allow it...

  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • climate litigation

      Climate litigation: how 2022 will shape 2023

      This past year saw a rise in climate litigation, with a focus on the commercial...

    • value whistleblowing

      Why we need to value whistleblowing

      Encouraging staff to speak up and stop harm can reduce legal and reputational risk—both for...

    • HR corporate trust

      HR: How to build employee trust in corporate culture

      The right HR director is essential to lead on a culture that gets the best...

  • Comment
      • View all
    • A week of business moving to the centre of human rights

      A week of events signals the initiatives underway to have companies play a central role...

    • audit reform IIA Why we need audit reform right now

      There is an "urgent need" for reform to the audit landscape as well as internal...

    • climate change energy crisis Sustainability and climate change: the other energy crisis

      The world is addicted to cheap energy. We need to admit this and have the...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • Board priorities 2023 Board priorities 2023: tact, trust and transparency

      We asked key figures what would help boards this year. The answers ranged from 'smarter...

    • Group of investors/shareholders in glass building Climate issues likely to figure prominently at next year’s AGMs

      A recent webinar heard that say-on-climate voting is expected to rise, while ESG remains a...

    • NEDs role NEDs ‘needed more than ever’ in times of uncertainty

      The non-executive director’s role is to both challenge and listen to management, agreed the panel...

  • Careers
      • View all
      • Selection
      • Board Moves
    • NED recruitment News round-up: this week in governance

      Your country needs NEDs; governance does not compute; financial firms get more women on board;...

    • HR corporate trust HR: How to build employee trust in corporate culture

      The right HR director is essential to lead on a culture that gets the best...

    • powerful CEOs Boards want powerful CEOs in tough times

      Single-minded chief executives have greater staying ability when business conditions are uncertain, research finds

  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Corporate & Advisory Services
    • Edelman Trust Barometer 2023

      2023 Edelman Trust Barometer

      The report is the result of the Edelman Trust Institute's research, which sampled more than...

    • Sophos 2023 Threat Report

      Barriers to entry for would-be cybercriminals are lower, with tools and tactics becoming available to...

    • The C-Suite Outlook 2023: On the Edge

      The Conference Board 2023 C-Suite Outlook survey reveals the events that C-suite executives see as...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Selection
    • Board Expertise
    • finance
    • Technology

Brexit, cybersecurity and climate change lead risk concerns for 2019

by Gavin Hinks on January 16, 2019

Risk experts have highlighted concerns about data security, global warming and the effect of geopolitical uncertainty on trade and supply chains as major risk factors this year.

British and EU flags, Brexit

Photo:Shutterstock

Even as prime minister Theresa May this week failed to gain parliamentary support for a Brexit deal, the country was being warned that the UK’s departure from the EU could “blind” corporate leaders to other risks present in the business world.

The warning came as part of predictions for risk in 2019 from the Institute of Risk Management (IRM).

“Financial services are rich targets for well-funded criminal or state sponsored hacker attacks, but unauthorised access isn’t the only data threat that firms face.”

–Sara Christman, IRM

Brexit and its implications remains an obvious headline risk, but the IRM was at pains to point out that other risks deserve attention, notably cybersecurity, extreme weather and climate change, financial concerns and political uncertainty on the world stage. It’s worth reviewing what the IRM has to say.

Macro trends

According to Socrates Coudounaris, chairman of the IRM, businesses will continue to face risks from current macro trends.

“Leaders who think critically about the future, anticipate disruption to their sectors, while building resilience and agility in their models, will be in a better position to tackle a challenging risk environment in 2019 and thrive,” says Coudounaris.

Photo: Shutterstock

The IRM asked a range of commentators to offer their views on risk in 2019, with Steve Greece, chair of the IRM’s health special interest group, warning that Brexit could obscure the view of other risks.

Elsewhere there were warnings for financial services. According to Sara Christman, speaking for IRM’s banking and financial services group, institutions are prepared for the severe shocks from Brexit, though there remain outstanding issues that could disrupt the ability to “execute strategy”.

She said “open banking”—the process of banks sharing data—was likely to be “evolution” rather than “revolution”. Cybersecurity will remain an issue, but so does ethics.

“Financial services are rich targets for well-funded criminal or state sponsored hacker attacks, but unauthorised access isn’t the only data threat that firms face,” she says.

“There is a reluctance to entertain the prospect of fellow workers or even business partners, suppliers or sub contractors, as capable of underhand practices.”

–Ray Flynn, IRM

The others are inappropriate use of data and unethical decision-making. “We expect these threats to foster increasing cooperation between security and privacy teams to ensure that controls are aligned to address the breadth of data risks exposure,” she says.

Ray Flynn, an IRM board member, predicts that 2019 will see further examples of unethical behaviour uncovered, despite the introduction of recent legislation. The reason? Companies are better at managing external risks than they are the risks emanating from within their own organisations.

“There is a reluctance to entertain the prospect of fellow workers or even business partners, suppliers or sub contractors, as capable of underhand practices.”

The risk of exposure is increasing, he says. “There is an element of iconoclasm and bloodletting involved as the gap between the ‘haves’ and the ‘have nots’ increases, which supports whistleblowing and puts pressure on regulatory bodies to act.”

Climate concerns

Climate is uppermost in the minds of many IRM commentators. Adverse weather will continue to happen as a result of commercial, industrial and agricultural activities affecting nature, according to Paul May, the chairman of Concordia Consultancy, writing for IRM.

Fund managers and insurers are either avoiding investments in, or insuring, industries contributing to global warming. However, he offers a warning.

“The trend to desert such industries is likely to continue to increase, but it is not proven whether that retreat would be likely to lead to their closure.

“While the rationale may be ethical and provide a ‘feel-good’ PR feeling, such investors and insurers will lose any opportunity to influence improvements and change,” he says.

Photo: Shutterstock

The chair of the IRM’s South Africa regional group, Zanele Makhubo, is blunt, calling the unpredictability of weather patterns a “serious risk”. She warns that governments will need to work with the the private sector in a multi-disciplined approach if climate change is to be properly tackled.

There is also a warning that a corporate reaction to climate change now forms a significant component in reputation risk.

Victoria Robinson, head of marketing and communications at the IRM, says: “Consumers are becoming more discerning and aware of protecting the planet, about the provenance of goods and, in the FMCG industries aware of slavery and working conditions—transparency is key.”

Data security

Climate is not the only issue in brand and reputation; data security is critical too. Indeed, one study puts the global average cost of a data breach at $3.6m per incident. Robinson says: “We have seen huge, well-known global corporates—airlines, hotel chains, banks and online retailers—suffer at the hands of hackers.”

As we have seen in the past, extreme weather can also affect supply chains significantly. Global politics—such the US-China trade battle—could also bite.

According to Carolyn Williams, director of corporate relations at the IRM, some organisations will this year “find their supply chains are affected, some will have anticipated it in advance, perhaps built up their skills and understanding, done some risk analysis, some scenario-planning and stress-testing covering their extended enterprise, putting controls in place; and some will discover that their strategy of just hoping for the best hasn’t quite worked out.”

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Business Roundtable takes aim at SEC climate risk reporting
    July 14, 2022
    Tim Cook, Apple

    Among its complaints, the Business Roundtable argues that no ‘safe harbor’ in the rules will increase the risk of corporate liability.

  • Shell faces shareholder litigation over climate risk
    March 15, 2022
    Shell logo

    Campaign group ClientEarth claims board members have breached their directors’ duties by failing to “properly prepare” for climate change.

  • Battle of the boards: risk, ESG and two-tier board structures
    April 22, 2022
    Board risk meeting

    There is an inherent conflict of interest between main and executive boards, with two different time horizons and two different risk impacts.

  • Executive pay, sustainability KPIs and the climate crisis
    December 1, 2021
    CSO with green tie and leaf in his top pocket

    Linking KPIs to sustainability targets results in complexity. A focus on corporate purpose is a better way to tackle climate change.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

Brexit, China, climate change risk, cybersecurity, data security, global warming, Institute of Risk Management, risk, supply chains

Search


Sign up to our Newsletter

Receive independent news, thoughtful journalism & expert insights about leadership, corporate governance & key boardroom issues straight to your inbox every week.

SIGN UP

Follow Us

 

 

 

 

Most Popular

  • Audit reform in the UK risks ‘losing momentum’
  • Activist investor campaigns rise back up to pre-Covid levels
  • How to ensure stakeholders trust your sustainability reporting
  • Elon Musk weighs in against ISS and Glass Lewis
  • Climate litigation: how 2022 will shape 2023
 

Featured Partner Profile

Diligent

Diligent

Diligent Corporation, which was founded in 2001, is headquartered in New York, NY with a European HQ in London. Diligent’s modern governance platform empowers leaders and teams at every level of the organisation to digitally transform and create ...

Featured Partner Resources

2022 AGM Season Forecast: An Eye on The Horizon

To help prepare for AGMs in 2022, Equiniti (EQ) hi...

Stakeholder Engagement: A Roadmap for UK Plc Boards

This guide aims to provide directors and their col...

Digital Boards: How Technology Adoption is Driving Culture Change and Resiliency

Digital tools proved their worth to boards during ...
Leadership in AI report

Leadership in AI

This report from Board Agenda and Mazars, in assoc...
Creativity in a Crisis: a Boardroom Map for Innovation

Creativity in a Crisis: a Boardroom Map for Innovation

In the uncertain times at the height of any crisis...
Board Directors Guide to D&O Liability Insurance - November 2020 - AIG & Board Agenda

Board Directors' Guide to D&O Liability Insurance

Directors face liability over a range of new threa...
Leadership-in-Risk-Management-Board-Report

Leadership in Risk Management: Board Report

Board Agenda, in association with Mazars and INSEA...
Director's Guide to Internal Investigations

A Director's Guide to Conducting Internal Investigations

An internal investigation must be handled meticulo...

 


 

ADVERTISE – FREE CORPORATE LISTING

FREE - Add your company profile to our Corporate & Advisory Directory.
ADD

ADVERTISE – PROMOTE YOUR REPORTS & WHITEPAPERS

FREE - Add your company profile to our Corporate & Advisory Directory.
Add Resource

Register Free

Register to receive free article views, selected resource downloads, and all the latest news alerts straight to your inbox. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Corporate & Advisory Services
  • Media Marketing Solutions
  • Contact Us
  • Careers
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
  • Sitemap
|