Twenty-three percent of executives said they are reconfiguring their business model to improve resilience. (Photo: Aerogondo/Adobe Stock)
Some global executives see employee risk as their greatest threat in 2024, according to a new report by Beazley.
Twenty-three percent of global executives cited employee risk as their chief concern, higher than any other business risk and up from 18% in 2022, the data showed. Meanwhile, 42% believe they currently operate in a high risk environment compared to 31% in 2023.
Other key insights:
- Twenty-three percent of global executives said they are reconfiguring their business model to improve resilience in their business.
- Twenty percent rank reputational damage and the risk of director's or corporate decision damaging brand value and customer trust as their top business risk.
- Twenty-four percent predict 'failure to comply with new ESG related requirements' will be the biggest threat they face in 2025 while 26% feel unprepared to anticipate and respond to this risk.
According to Beazley, a single misstep for business leaders involving employer, reputation or ESG risk can lead to significant financial, legal and reputational consequences for a firm and its directors, "no matter what size or sector it operates in."
Business risks include:
- Employer risk: Hybrid working, shifting workplace cultures and a growing focus on misconduct has made employer risk a chief concern for global executives.
- Reputation risk: In an increasingly interconnected world, businesses face scrutiny from a host of stakeholders including shareholders, regulators, the media and the general public. Executives are under the microscope like never before.
- ESG risk: Data shows 67% of global executives believe ESG regulation is too complex, while 70% want more guidance from regulators. Anti-trust rules around ESG in a number of U.S. states has also created new challenges from a directors' and officers' (D&O) liability perspective.
"While macroeconomic conditions appear to be stabilizing, D&O risks are still front of mind for global business leaders," said Bethany Greenwood, CEO of Beazley Furlonge Ltd.
"In the event of a company filing for bankruptcy, D&O litigation can quickly follow for executives. Amid persistent inflation and the ongoing threat of recession, this has been a key threat in recent years," she added. "At the same time, businesses and their executives are feeling the heat, with D&O liability extending beyond the realms of financial performance, with litigation now being brought against executives following cyberattacks, supply chain disruption and employment-related issues."
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