Recessions and other economic risks are a major concern when it comes to liability insurance for directors and officers, Allianz Global Corporate & Specialty said in a report released on Tuesday.
“The likelihood that a public company will be sued in a securities class action increases when economic performance is poor and a company’s stock price falls.
“In such a scenario, investors may argue that the company failed to disclose the challenges it faced in maintaining its earnings guidance,” the report said.
Cybersecurity is another concern, according to the report. Whether it’s ransomware, supply chain or data breaches, companies “face an evolving landscape of cybersecurity threats,”; so “it’s no wonder investors increasingly view cybersecurity risk management as a critical component of a company’s board of directors’ risk oversight responsibilities,” it said the.
As board fiduciaries, “board members are therefore expected to develop and maintain cybersecurity responsibilities before, during and after each cyber incident,” the report said.
“All over the world, directors have already been held accountable, including in derivative and direct litigation, for their alleged failures to put in place appropriate corporate governance to protect against cyber security risks,” the report said.
Other issues highlighted in the report include environmental, social and governance disclosures and exposures; US Class Action Securities Litigation and Antitrust and Competition Risks.