Health & safety has emerged as the most important risk facing directors and officers (D&O) in 2024, with risk associated to cyber attacks falling to second place, according to broking and solutions company WTW and global law firm, Clyde & Co.
Both firms recently released their latest Global Directors’ & Officers’ Survey Report, which showcased how health and safety has become the top concern for D&O.
The survey identifies and analyses the key risks for D&O worldwide, covering UK, Europe, Asia, Australasia, Latin America, North America, Africa and the Middle East.
Health and safety was considered the top risk with 84% of global directors, officers and risk managers ranking it as very or extremely important, closely followed by cyber-attack (including cyber extortion) risks on 79%.
Meanwhile, data loss has fallen to 3rd place, after coming in 2nd place the previous year.
Interestingly, for the first time since 2019, the threat of a company being a victim of crime has dropped out of the top seven risks by global directors.
Other noteworthy findings from the survey included climate change, while it did not make the top seven risks globally, the importance of climate change remains high across certain regions such as Asia, Australasia and the Middle East, where it has been identified as a top seven risk.
At the same time, it was also revealed that a considerable portion of respondents are exploring or using captives and other mechanisms. This may indicate a strategic approach to managing D&O risk despite the softer market conditions.
Jeremy Wall, Head of Global FINEX, WTW, commented: “We are pleased to be launching the 2024 Global Directors’ and Officers’ Survey Report in collaboration with Clyde & Co. This year marks our most expansive survey yet, with contributions from over 50 countries, and for the first time, our survey includes detailed insights into Africa, the Middle East and India offering a more nuanced understanding of regional risk dynamics.”
He added: “While the last five years have seen cyber and data breaches being a top risk for directors and officers, it was a surprise to see Health & Safety be considered the top risk. Clearly the pandemic continues to impact the business environment with some of our clients citing the rise in mental health as a considerable concern in their organisations. We strongly recommend that organisations prioritise evolving their risk management practices, addressing the emerging threats, particularly around health and safety.”
James Cooper, Partner and Global Chair of the Insurance Practice, Clyde & Co, said: “The report underscores the dynamic and complex nature of the risk landscape currently facing directors. What we have seen is that there is a pressing need for better education on D&O insurance and indemnification practices to ensure directors and officers are comprehensively protected. By leveraging the insights and recommendations from this report, organisations can better navigate these challenges, enhancing their resilience and strategic response to risks.”
