Thursday 14 March 2019 12:21 am

Businesses fear political threats and cyber attacks in uncertain risk environment

More than three quarters of general counsels and board members view the risk landscape as having become significantly more complex in the last three years, with political risk cited as the number one risk facing businesses and technological risk a close second.

A survey by law firm Clyde & Co and professional network organisation Winmark of general counsels and board members found that the majority did not believe their organisations are sufficiently prepared to deal with the new threats.

Read more: Political risk is about more than elections, as UK insurers know

Less than half (43 per cent) of GCs and board members (35 per cent) think their companies are sufficiently prepared for the impact of rising political risk.

Only eight per cent of GCs thought Brexit would have a positive impact on their company versus 48 per cent who thought it would have a negative impact. Five per cent of board members thought Brexit's impact would be positive and 30 percent thought it would be negative.

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 GCs and board members thought data breaches and cyber attacks were the greatest threat to their organisation linked to the use of technology.

Read more: Think of cyber threats are a business risk, not a dark art

Four fifths (78 per cent) of GCs and board members (79 per cent) think data breaches are the greatest technological threat, with cyber attacks almost level (75 per cent of GCs and 79 per cent of board members).

More than half of GCs (56 per cent) and board members (64 per cent) feel unprepared to handle cyberattacks and 42 per cent of both groups feel unprepared to deal with data breaches.

Despite the worries about the threat from cyberattacks, 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.”