D&O priorities shift away from cyber, health and safety now top risk

In recent years, cyber and data breaches have been the primary concern for global directors, but a new survey by WTW indicates a noteworthy shift, with health & safety now taking precedence as the top risk for directors and officers worldwide.

The 2024 global directors’ and officers’ survey report from WTW and law firm Clyde & Co reveals that 84% of global directors, officers, and risk managers consider health and safety as “very or extremely important”, surpassing cyber attack risks (including cyber extortion), which ranked closely behind at 79%. 

According to the survey report, which analyses key risks for D&O across various regions including the UK, Europe, Asia, Australasia, Latin America, North America, Africa, and the Middle East, data loss, which previously held a higher rank, has now dropped to third place.

WTW also noted that for the first time since 2019, the threat of an organisation being a victim of crime has fallen out of the top seven risks identified by global directors.

Furthermore, emerging risks such as systems and controls and breach of sanctions are gaining prominence, reflecting geopolitical tensions and the evolving corporate governance landscape.

While climate change does not rank in the top seven risks globally, it remains a significant concern in regions such as Asia, Australasia, and the Middle East.

The report also highlights a notable number of companies exploring or using captives and other alternative risk transfer mechanisms, indicating a strategic approach to managing D&O risk, despite the softer market conditions.

Jeremy Wall, head of global FINEX, WTW, said: “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,” Wall added. “We strongly recommend that organisations prioritise evolving their risk management practices, addressing the emerging threats, particularly around health and safety.”

“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 concluded.

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.”

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