Research suggests the risk landscape is ‘significantly’ more complex than three years ago, highlighting budget and skills gap concerns, and worrying signs that corporates are unprepared for cyber risks. Less than half (43 per cent) of general counsel and board members (35 per cent) believe their organisations are sufficiently prepared for the impact of rising political risk and despite acknowledged increased cyber risk there is a tangible skills gap when it comes to investing in the right technology, according to a new Looking Glass report from Clyde & Co and Winmark that is definitely worth a read.
Old adage rings true
A survey of 89 general counsel and 21 of their board member colleagues found that they view the risk landscape as having become significantly more complex in the last three years (78 per cent and 73 percent respectively agree), while political risk is considered to be the top threat facing businesses, with technological risk a close second. Simon Konsta, senior partner at Clyde & Co, comments ‘businesses today are having to adapt to a 21st century risk environment, in which traditional risks such as political and property risks are being compounded by new and fast developing risks such as cyber, climate change and reputation.’ He added, ‘how businesses respond to this environment is one of the most pressing issues facing boards today. As this year's report demonstrates, the GC has a leading role to play in helping the board navigate the challenges and futureproof the business.’ Peter Hirst, partner at Clyde & Co, comments ‘it should be something of a concern that neither GCs nor the board feel sufficiently prepared for the threat of political risks. Over the last couple of years the political landscape has become increasingly complex, causing new and significant issues to arise which require business to be on the front foot in order to mitigate the risk.’ He added, ‘on the technological front the old adage of the legal department being more risk averse rings true. This should serve as a comfort to the board, knowing their GCs are taking the risk seriously and erring on the side of caution.’
Unprepared for cyber risks
Four fifths (78 per cent) of GCs and board members (79per cent) thought that data breaches were the greatest technological threat, with cyber-attacks almost level (75 per cent of GCs and 79 per cent of board members). Over half of GCs (56 per ) and board members (64 per cent) feel unprepared to deal with cyber-attacks and 42 per cent of both groups feel unprepared to handle data breaches. Despite the concern over a lack of preparedness for cyber-attacks 42 per cent of GCs and 33 per cent of board directors admit to not having a crisis plan in place. Isabel Ost, legal director at Clyde & Co, says ‘organisations must put together crisis management plans and practice their responses for data breaches and cyber-attacks. Both present a severe risk for a company’s operations and reputation. No IT systems are infallible and human error continues to expose organisations so it is essential to be prepared for the worst.’ The full report can be found here.