Strong corporate governance and the topic of director’s liabilities has never been higher on the agenda for organisations and we are delighted to partner with Airmic on the 2019 research project and present this report.
Organisations must navigate the evolving risks and opportunities in today’s world in order to be successful. Business and economic transformation, the digital revolution and changing social attitudes are producing a world in constant flux. Rising geopolitical tensions, within and between countries, are presenting further challenges to organisations in how they work with governments and conduct trade.
As a result, businesses and boards that can anticipate threats, prepare for them and adapt accordingly will be best placed to thrive. This will require strong corporate governance that allows organisations to innovate and take the risks they need to. Directors and officers who are in tune with the organisation’s risk profile will also develop a greater understanding and awareness of their own personal liabilities. Insurance should be used to enable, as well as protect directors and officers.
The boardroom and senior leaders are facing a wider variety of risks than ever before. Data security is the top concern within the boardroom according to Airmic members, but directors and officers are also facing more collective US shareholder actions against non-US firms and an increase in activity involving corruption and bribery claims. Appearing on the horizon, new laws in the European Union are likely to facilitate groups of consumers launching collective actions and seeking compensation.
While activity from regulators and enforcement agencies increases, legal defence costs are also going up. As a result, risk and insurance professionals must understand the D&O cover purchased and ensure directors and officers understand the policy, where it applies and the limits available.
We hope the survey will inform those involved in the purchasing and usage of D&O insurance. We recommend reading this report in conjunction with the Guide to Directors & Officers Liability published with Airmic in 2018.
Head of Financial Lines
AIG UK Ltd