Large companies are preparing for an intense level of scrutiny over the next 12 months as the public and government show more interest in their business practices and behaviour following COVID-19.
That is according to a new report by FTI Consulting, which explains how socio-economic fault lines exposed by the pandemic have put companies under “extreme” pressure to integrate technology, strengthen reputations, and improve sustainability practices and corporate culture.
After surveying more than 2,800 executives from large public and private companies across G20 nations, the researchers found that 83% are being, or expect to be, investigated over the next year.
The top three investigation worries are business conduct and treatment of customers, sustainability and environmental, social and governance (ESG) practices, and the relationship with public bodies and government contracts.
Almost a third of respondents identified each of these areas as leading concerns, with the services and financial sectors most likely to report experiencing regulatory or political scrutiny over the past year.
“The ever-changing landscape will put the onus on companies to take a proactive stance regarding investigations,” said Edward Westerman, global investigations initiative leader at FTI Consulting. “Leveraging new technologies and data and analytics can help companies efficiently manage an ongoing investigation and help mitigate the risk of future crises."
The report defines large companies as those with more than 250 employees, or over $50m (£36.6m) in annual global revenue, or with a balance sheet of over $43m.
It highlights how 78% of firms surveyed suffered a cyber attack in the past 12 months, with 32% experiencing a loss of customer or patient data, and a further 30% reporting a loss of third-party information.
Class actions and mass consumer claims were experienced by 13% of respondents over the last year, with the same percentage expecting this to continue in the next 12 months, and a third strongly agreeing that these are becoming more costly.
Moreover, the survey found that 30% of large companies have experienced a shortage of talent and skills over the last 12 months, and that 68% have reported increased mental health issues in their workforce since the start of the pandemic.
“The ability of businesses to handle crises has been a defining factor of their success during the pandemic,” said Caroline Das-Monfrais, global resilience lead at FTI Consulting. “However, COVID-19 has exposed and exacerbated economic and social fault lines.
“Employee well-being, talent shortages, treatment of customers, financial crime and cyber security all have risen up the corporate agenda, and businesses are responding to protect value and build resilience as they look towards future growth.”
Image credit: iStock
Author: Chris Seekings