Less than half (43%) of general counsel and board members (35%) 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.
A survey of 89 GCs 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% of GCs and 73% of board members agree), while political risk is considered to be the top threat facing businesses, with technological risk a close second.
Lack of preparedness a cause for concern and less than half (43%) of GCs and board members (35%) believe their organisations are sufficiently prepared for the impact of rising political risk. While there is a significant disconnect between the views of GCs and their boards when it comes to their organisations preparedness for technological risk (37% vs 60% say their organisations are prepared).
Peter Hirst, partner at Clyde & Co, said: “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.”
The research also found that GCs and board members consider data breaches and cyber-attacks to be the greatest threat linked to the use of technology. Four fifths (78%) of GCs and board members (79%) thought that data breaches were the greatest technological threat, with cyber-attacks almost level (75% of GCs and 79% of board members).
Worryingly, more than half of GCs (56%) and board members (64%) feel unprepared to deal with cyber-attacks and 42% of both groups feel unprepared to handle data breaches. This is warranted given that 42% of GCs and 33% of board directors admit to not having a crisis plan in place.
Investment in appropriate technology is hindered by lack of funding, with 55% of GCs saying they have difficulty in securing budget. Despite the growth in the number of companies with a legal operations head there is also a tangible knowledge and skills gap in-house: 40% of GCs said that deciding what would make the best investment is a ‘barrier’ and a quarter cited lack of knowledge as an issue.
Interestingly, data analytics and AI are the two technologies expected to have the biggest impact on organisations in the next two or three years but neither is well understood. Almost half of GCs said data analytics would have a high impact on their organisations and 22% said they have a good understanding of it. In terms of ‘AI’, 39% said it will have a big impact and 31% said they understand it well.
Simon Konsta (pictured bottom left), senior partner at Clyde & Co, said: “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. 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.”
Read the full report here.