In my recent conversations with directors and executives, three categories of risk consistently emerge as priorities for the year ahead: corporate governance, compliance, and risk management itself. Each area is undergoing changes that call for recalibration, bringing both challenges and opportunities. 

 

Drawing on my insights from industry events, client work, and regulatory developments, this article will explore key 2024 trends within these three crucial risk spheres and give insights into the potential practical impacts for UK institutions. 

As corporations navigate increasingly stormy seas in 2024, corporate governance must evolve to boost organisational resilience without sacrificing agility. Boards must take the lead in promoting ethical yet informed risk-taking cultures that allow firms to stay nimble amidst market turbulence. 

 

With that in mind, below are some of the key 2024 governance trends that predominantly centre on enhancing oversight while equipping leadership to handle multiplying crises. 

 

A recent PwC report found that the unstable global landscape will intensify uncertainty, putting pressure on corporate boards. Activist investors will pounce on struggling firms, requiring boards to foster a resilient culture grounded in ethics and purposeful risk-taking. 

 

In that respect, more rigorous board evaluations and governance reviews will likely be key to survival amidst market turbulence. 

 

Per Deloitte’s 2024 regulatory outlook, banks, in particular, face a turning point, with geopolitical and macroeconomic strains set to challenge operational resilience and conduct. When you pair that with the many regulatory change programs underway, there’s a compound effect on their current resource squeeze. 

 

The worry is that many organisations in the financial sector might resort to quick fixes to achieve compliance, fraying relations with regulators demanding enduring solutions. 

 

As mentioned, an enhanced focus governance and compliance feature heavily across 2024 risk outlook reports. With the current turbulent economics in the UK (and globally), companies will face increased pressure to strengthen ethical codes of conduct as scrutiny of business integrity heightens. 

 

Clearer standards around integrity and ethics will enable firms to take the right risks while remaining conscious of potential impacts and operating within legal and ethical frameworks. 

 

Further to that point of informed risk-taking, a recent Verdantix report argues that with geopolitical crises multiplying and amplifying, resilience is vital but often insufficient in many multinational organisations. 

 

So, firms need to work on retaining agility through ethical, data-driven risk-taking attuned to corporate purpose, and boards must foster a culture that allows leadership to navigate uncertainty without straying from organisational values. 

 

There’s been a lot of worry regarding the upcoming proposed changes to the UK corporate governance code. But in a press release on 7 November 2023, in response to many of the concerns raised about the burden of these changes, the FRC has pared back proposed governance code changes, retaining enhanced risk and controls reporting. 

 

Additional reforms are underway around board diversity and linking executive pay to ESG outcomes. But the severity of changes is not quite as onerous as first thought, which should give organisations a healthy balance between oversight and agility. 

As regulatory scrutiny intensifies, compliance functions are tackling the paradoxical challenge of managing escalating responsibilities with dwindling budgets. Key compliance focal points for the turbulent year ahead centre on combatting fraud and cybercrime while optimising limited resources to uphold integrity. 

 

With households under financial strain, the Finance Conduct Authority (FCA) warns that investment scams and online fraud will persist, putting employees at risk. Banks prevented over £650 million in unauthorised 2023 fraud, but losses still totalled £1.8 billion. 

 

This suggests vigilant compliance training is essential, focusing on fraud red flags and controls to detect and prevent attacks. There’s set to be heightened anti-bribery enforcement across hundreds of organisations, according to compliance company Skillcast, requiring robust ethical policies to deal with incidents. 

 

Despite being no recent phenomenon, cyber threats show no signs of abating. The average breach now costs firms $4.45 million, says IBM, underscoring the legal, financial and reputational risks. As remote work persists, continuous security monitoring, policy updates and staff training remain imperative for managing this foremost compliance challenge. 

 

One of the biggest trends for compliance in 2024 is the sheer lack of resources being allocated to this vital business function. 

 

Procedure management company Clausematch has reported they expect over half (57%) of compliance teams to confront budget cuts despite escalating regulatory change. With complexity rising but budgets strained due to harsh economic operating conditions, efficiency and technology adoption are vital. Compliance leaders must optimise existing resources to uphold integrity while exploring creative solutions to the paradox of doing more with less. 

 

In 2024, the headline act is the new Data Protection and Digital Information Bill (DPDI), passed through parliament and set to take over from the EU’s GDPR legislation. As these personal data laws are reformed, companies must ensure their data strategies align with legal changes and balance innovation against security. 

With the general economic instability, risk management must evolve to promote resilience through ethical, socially conscious strategies grounded in long-term sustainability. Key 2024 risk management trends centre on reputational risks linked to brands’ social voice integrity, ethical integration in decisions, and mandatory ESG disclosures driving transparency. 

 

A company’s reputation and corporate social voice are increasingly linked to its social media presence. And while promoting ethical and corporate social responsibility is often lauded by consumers, organisations must tread carefully. Amidst amplified public scrutiny, seemingly innocuous posts can quickly go natively viral and rapidly harm public trust and sales. 

 

For instance, one ill-thought-out Bud Light social media advert recently irked a large swathe of its conservative consumer base, leading to widespread boycotts and Anheuser-Busch revenue falling by more than 10% (the stock price fell by almost double that). Thus, careful online brand management is crucial. 

 

According to a recent trends report from compliance, risk, and compliance platform NAVEX, attention to internal ethical trends helps firms address risks proactively through cultivating principled cultures. 

 

As new technologies enable vast data analysis benefiting risk planning, they also raise ethical questions around privacy and potential misuse. Therefore, one of the big trends this year will be better ethical integration in risk decisions to foster greater financial and societal accountability. 

 

Each year sees an ever-increasing focus on ESG, and 2024 will be no different. For starters, mandatory sustainability disclosures are expanding, with nearly 50,000 EU companies set to report by 2024 under the Corporate Sustainability Reporting Directive (CSRD). These requirements will affect UK-based companies with operations in the EU. These new regulations will boost ESG transparency and should be integrated into risk frameworks. As stakeholder scrutiny spotlights ecological impact, there should be a focus on net-zero commitments, with robust plans balancing short-term viability with long-term planetary health. 

As we navigate the early weeks of 2024, it’s clear that risks are multiplying across governance, compliance, and broader risk management realms. Though the challenges are mounting, this period of flux also allows for positive transformation. 

 

Through our work with clients, we’ve witnessed the power of evolving governance approaches centred on accountability, resilience, and sustainability. We also passionately believe that companies fostering ethical and informed risk-taking cultures are best positioned to survive the current market turbulence. 

 

At Corporate Assist, we recognise that bolstering risk frameworks without overburdening organisations demands a tailored, hands-on approach. We offer specialised support services assisting clients to: 

 

 

Drawing on my experience collaborating with leaders across sectors, I'm equipped to help firms assess and enhance their risk strategies for the unpredictable terrain ahead. If you seek governance, risk or compliance support customised to your growth objectives, please reach out to discuss where my services could provide value. 

 

I'm available at amy@corporateassist.co.uk or 07576 829 591, and I look forward to helping you achieve strategic resilience amidst this period of significant change.