Following the economic meltdown of 2008 came tighter regulations for businesses. And with that comes executives who constantly fear investigations.
This paranoia has reached epic proportions, according to a report from insurance broker Willis and law firm Allen & Overy, which states that the threat of regulatory investigations, criminal penalties and anti-corruption legislation are among the top concerns for directors and officers.
They have good reason for worry.
More than one in four respondents to the survey have experienced a claim or investigation involving a director at their companies. Even more concerning, one-third of respondents were unaware of the personal exposure of directors to antitrust enforcement.
“Directors and high-ranking officers in public and privately held corporations are under scrutiny like never before as they conduct business in an increasingly regulated and complex global business environment,” said Andrew Barton, counsel at Allen & Overy.
A common solution to such risks is D&O insurance, which “has moved up the agenda,” according to Francis Kean, executive director in Willis’s financial and executive risks practice. But directors are also concerned about D&O’s complex terms, according to the report.