The COVID-19 pandemic has brought many new risks that have compelled boards, C-suite, and general counsels (GCs) to prioritise addressing people and regulatory risks in an ever-more complex risk landscape, according to the latest Looking Glass Report by law firm Clyde & Co and membership network Winmark.
The annual report found that people-related risks, such as mental health concerns and attracting and retaining talent, were the top concerns in 2021 – with 69% of respondents expecting this risk to have a high or very high impact on their organisations.
Increased regulation and compliance (64%) ranked second in terms of respondents considering it as a high or very high impact risk. It is also the most significant among the GC sample. Meanwhile, technological risk (54%) took third place.
People-related challenges – such as recruiting and retaining staff due to record vacancies and high competition for talent, and fears of skills shortages that will affect long-term succession planning – were considered by respondents as high-impact risks. Meanwhile, staff well-being, mental health, and supporting remote workers were considered as other high priorities.
Specifically, 69% overall ranked people challenges as a high or very high-impact risk, with 80% of C-suite respondents citing it as a high-impact risk, and 30% of C-suite respondents admitting they were not prepared for this risk.
Regarding regulation and compliance, 64% of respondents expect increased regulation and compliance to have a high or very high impact on their businesses, particularly when managed across international regulatory regimes. However, 70% of GCs said dealing with an increasingly regulated global business environment will significantly impact them and their legal teams more than any risk in two to three years.
In third place, technological risks remained prominent this year as the pandemic persists, with 54% of respondents considering IT disruption, data loss issues, and implementation of new technology as high-impact risks. Meanwhile, remote working, e-commerce, and digitisation of operations have further heightened data security concerns.
With 79% of respondents claiming that the risk landscape has become more complex than two to three years ago, a further 69% said risks such as the pandemic and climate change will require new approaches to address and manage risks.
“The risk landscape in the last 12 months has been increasingly fast-moving and unpredictable, with the pandemic testing the agility and resilience of all organisations,” said John Madden, research director at Winmark. “Leaders are having to reframe and rethink their working practices and the purpose of their operations, which will result in new ways of managing and adapting to known and unforeseen risks.”
