Executives today face the almost impossible balancing act of doing the ‘right’ thing according to the mood of their major stakeholders while meeting intensifying economic and sometimes conflicting regulatory pressures.
Missing the local tone could alienate increasingly concerned employees and invite challenge from forces such as regulators and activists, which will call C-suite executives to action, no matter the impact on the firm’s bottom line. In the US, however, sentiment has shifted and ESG measures struggle to win favour among some shareholders should their impact hit earnings.
According to our data, executives believe employer risk – defined as failure to support staff, including mental health concerns, or facilitating safe operating conditions post pandemic – is thought to have doubled in two years. In 2021, 11% of leaders surveyed said failure to support staff was their biggest business risk compared to 22% in 2023. Looking ahead, concern remains high with a fifth of business leaders (20%) predicting that this will still be their number one business risk in 2024.
Bad behaviour can become a Directors’ & Officers’ liability risk and it can escalate into a much, much bigger issue than one manager in one location if key personnel are ignoring it. Equally, employees need a secure channel to report their concerns and firms need a forum to investigate and deal with allegations appropriately."