Cyber-attacks and Data loss top concerns facing Directors according to Clyde & Co and Willis survey

The impact of the global pandemic is front of mind for Directors and drives movement in the Top 5 D&O risks in the D&O liability survey from Clyde & Co and Willis Towers Watson.

Cyber-attacks and data loss are the top risks facing Directors & Officers, with COVID-19 and the forced change in working practices serving to heighten the concerns, according to a global survey from global law firm Clyde & Co and Willis Towers Watson.

The survey is the first time Clyde & Co has partnered with Willis on its annual D&O Liability report, which in its 8th year. The survey findings are the result of interviews with over 250 directors, non-executive directors, partners, in-house lawyers, risk offices and compliance professionals from across UK, Europe, APAC and the US. The report features analysis and insight from Clyde & Co lawyers and Willis Towers Watson experts on the findings and some of the significant classes of risk faced, including those posed by cyber threats, class actions, insolvency, regulatory exposures, climate change and more.  

This year’s report has identified the Top 5 risks directors are facing: cyber-attacks (56% of respondents saying the risk was very significant or extremely significant); data loss (49%), regulatory risk (46%); Health and Safety risk (41%); and the risk of Employment claims (38%).

Other key findings of the report include:

• Increased vulnerability to data loss is resulting from business moving to new procedures and systems overnight due to the COVID-19 pandemic with remote working creating a fertile ground for cyber criminals.
• Regulatory and litigation risk continues to challenge organisations with board diversity now becoming mandatory to most businesses
• Expected concern about insolvency featured considerably lower than in the last survey despite speculation of a potential wave of insolvencies.

Commenting on the launch of the report, James Cooper, chair of the Global Insurance Practice Group and head of the Financial Institutions and D&O team at Clyde & Co says, “This important survey highlights the changing risk environment facing key businesses today. We are pleased to collaborate with Willis Towers Watson on this survey report which highlights continued concern around cyber-attacks and data loss as well as the impact of regulatory change on business.”

Jeremy Wall, Head of Global Finex, Willis Towers Watson, comments: “We are delighted to be launching the 2021 Directors & Officers survey which, for the first time gathers the views of Directors & Officers internationally. We are grateful for the contributions from Clyde and Co which have delivered a valuable new perspective to our interpretation of the survey results and have enabled us to deliver a great resource for Directors and risk managers.”

Clyde & Co’s global financial institutions and directors & officers team advises the London market, US and other international insurers and reinsurers on all aspects of FI and D&O work. The team has built a reputation for successfully defending claims and handling the most complex coverage issues, including claims involving directors’ disqualification proceedings, wrongful trading actions and other claims arising out of insolvency, defence of civil penalty claims and criminal enforcement action arising from alleged corporate and financial misconduct.

The team has been involved in advising on many of the key issues in the FI and D&O market. These include cyber liabilities, increasing global regulatory activity and related policy triggers, the impact of soft wordings, exposures resulting from benchmark rigging allegations, disgorgement, claims under fidelity policies related to unauthorised trading, IPO allocations and ratings agency claims.

Download the full report here.