Clyde & Co. has published the second part of its 2024 Enterprise Risk Radar, providing insights into the challenges business leaders face in a volatile risk environment.

The first part, released in June, addressed the “multiple crises” facing leaders, including prolonged economic instability, geopolitical tensions, and the disruptive impact of artificial intelligence.

According to the latest findings, 43% of business leaders see regulatory scrutiny as an increasing operational threat due to the growing number of new initiatives and a perceived lack of clarity and consistency in these regulations.

People-related challenges rank second in terms of high-impact risks, with 58% of leaders identifying them as a threat to multinational operations. Meanwhile, climate change has dropped in the global risk hierarchy from sixth in 2023 to ninth, reflecting the increasing urgency of other factors.

Cyber ​​threats remain the most significant technology risk, with 76% of respondents identifying it as their top concern. However, for the first time, 29% of business leaders also highlighted disruption from AI as a high-impact risk.

Commenting on the evolving risk landscape, Eva Maria Barbosa (pictured above), partner at Clyde & Co in Munich, noted that risk discussions have become more inclusive over the past decade.

“Every element of liability is on the table, and discussed in advance. When arriving in a new country, companies now have detailed exit plans that clearly outline how they might exit a jurisdiction in the coming years, if the risks are too great. Inevitably, there will be a certain amount of ‘keep calm and carry on,’” Barbosa said.

Barbosa also acknowledged that while companies cannot immediately reverse large investments, understanding and planning for risks is critical.

Helen Bourne, partner at Clyde & Co in London, also addressed the issue of cybersecurity, particularly in the context of hybrid working and remote working technology.

“The best way for organizations to address this and build security and resilience is to train their employees well enough to gain sufficient awareness of potential threats so that they can then detect and report them quickly and effectively,” said Bourne.

Roshanak Basiri West, Partner at Clyde & Co in Dubai, spoke about the changing investment landscape in the Middle East. She noted that although international investment in the region has declined slightly, this has created opportunities for Middle Eastern investors to pursue overseas investments.

“For the Middle East, all the risks that are unfolding in other regions are opportunities because we are relatively far from the political turmoil in the US, France or the UK,” West said.

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