The pandemic has brought people-related risks and evolving regulatory concerns to the fore for general counsel and C-suite executives, a new report has revealed. 

The Looking Glass Report, published by UK law firm Clyde & Co and membership network Winmark, showed that 69% of the 140 surveyed global business leaders and general counsel have begun to view staffing issues and concerns over employee mental health as the number one risk factor that could impact their organisations. 

Around 80% of C-suite respondents cited people-related challenges as a ‘high impact’ risk, with 30% of respondents suggesting they were not prepared to handle such risks.

The findings echo those of Thomson Reuters and Georgetown Law’s Center on Ethics and the Legal Profession’s report published last month that revealed more than half of US law firm leaders are now viewing acquiring and retaining talent as a high risk to future profitability. 

Staff well-being and mental health, an issue that came under the microscope during the pandemic especially when discussing more junior employees, will continue to be a priority in order for organisations to attract and retain staff, bolster retention rates and ensure that higher numbers of remote workers are fully supported, the Clyde & Co report said. 

“We take the wellbeing and the mental health of our staff even more seriously than we did before and I’ve seen other firms do so too,” said Neil May, chief operating officer of Southeast England-based law firm Thackray Williams in the report. 

May said his firm has started to communicate more with its people on mental health issues, implementing weekly calls including with people who were furloughed, and conducting surveys to keep track of staff wellbeing. 

Heidi Watson, an employment partner at Clyde & Co, said the focus on wellbeing and mental health that came from the pandemic was a “positive step” for businesses and their teams, adding that organisations will place more emphasis on workplace culture and training and development to make themselves more attractive in the lateral talent market. 

Increased regulatory and compliance risks were also cited among the top concerns this year, with 64% of all respondents listing an increasingly regulated global business environment as an area of concern almost two years into the pandemic. 

Some 70% of surveyed general counsel predicted that dealing with increasingly regulated global business environments would create more work for them and their legal teams, particularly related to bribery and corruption legislation, modern slavery, GDPR and environmental, social and governance regulations. 

“In a multinational, every single geography is doing a different thing, plus domestically in the US we have federal rules, state rules and even country rules — how you monitor all that day-to-day is a challenge, particularly in a high litigation environment,” said one chief ethics and compliance officer for a US-based consumer goods company. 

The biggest change to last year’s cited risks was the perception of climate and societal risks, with 32% more general counsel and 10% more board members highlighting climate-related risks than in 2020. 

General counsel will need to respond to governments, regulators and other stakeholders and help their organisations demonstrate accountability and transparency in public disclosures around environmental issues, the report said. 

Nigel Brook, partner at Clyde & Co and member of the firm’s climate change risk practice, commented: “Putting climate risk awareness at the heart of decision-making and embedding it into both strategy and culture at all levels of an organisation is crucial. Since achieving net zero will require significant investment as well as regulation, this could create major opportunities for businesses, as well as risks they need to be very alive to.”