CEOs are currently facing many and varied challenges. Managing digital integrity and mitigating the risks of data protection breaches and cyber-attacks are pressing concerns for all businesses.
Add to that the destabilising impact of tax increases, geopolitical shifts and the ripple effect of some of Trump’s more volatile policies. The current uncertainty around tariffs has potential ramifications for any organisation operating internationally or with global supply chains.
Moreover, ESG policies have gained prominence, with investors and consumers increasingly demanding sustainable and ethical business practices. CEOs must now balance profitability with social and environmental responsibilities, navigating a landscape where failing to address ESG concerns can result in reputational damage and financial loss. The complexity of this is only exacerbated by Trump’s withdrawal from the Paris agreement and roll-back of ESG regulations and reporting requirements. Any increased divergence between US and European legislation will only further complicate international business.
So, it has never been more important to leverage the right legal support to help navigate this complex landscape and prioritise risk management. Here are some key actions to take to stay ahead in these turbulent times.
Contract Management is a Must
Tax hikes, tariffs and geopolitical events all threaten to disrupt supply chains and will potentially put some businesses out of operation altogether. Supplier insolvency can pose an enormous risk for businesses.
So, it is vital that organisations know their contracts inside out, both their obligations and what they can expect from suppliers. Exit options in contracts are worthy of particular consideration. Bringing in a lawyer who is familiar with operations and can manage the contract drafting, review and sign off processes is an investment worth making.
Review Tax Planning Strategies
Navigating the complexities of tax regulations is crucial for any business and made more pressing by the impending tax raids in April. Significant penalties, legal action, and reputational damage can result from non-compliance.
Working closely with tax advisors and legal teams will help businesses to manage liabilities effectively and stay up to date with evolving tax regulations. For any business operating internationally, it is particularly important to be well advised as the implications of international tax laws can be complex.
“Cyber-attacks and failure to adhere to data privacy legislation can be extremely costly, financially, reputationally and in terms of employee time.”
Prioritise ESG
Though ESG policies may be being rolled back Stateside, the UK government has reiterated its commitment to net-zero greenhouse gas emissions by 2050. Regulators, lenders and consumers are placing increasing importance on sustainability and ethical practices and young talent often use it as a measure when deciding whether to join an organisation. Businesses that fail to address ESG risk losing investment, their reputation and the best candidates in the job market. They may also put themselves out of the running for preferential business loan rates. Though many high-profile banks have recently left the Net Zero Banking Alliance, currently almost all UK lenders have joined the pledge to reduce carbon emissions in their lending investments portfolio.
Despite the apparent backlash against ESG, the imperatives to operate ethically and sustainably as a business should outweigh any justification not to. As the holders of the company conscience, ESG should sit with legal. Businesses need to set realistic and measurable ESG targets and report progress transparently. Financial planning should be aligned with any ESG goals and ESG practices should be audited to maintain credibility with key stakeholders.
Take Data Privacy and Cyber Security Seriously
Cyber-attacks and failure to adhere to data privacy legislation can be extremely costly, financially, reputationally and in terms of employee time.
Businesses need to stay up to date and compliant with relevant legislation. Undertaking an audit of systems and processes and keeping a ‘Record of Processing Activities’ will help. It’s important to have a unified, company-wide approach to data privacy and cyber security. IT and legal/compliance teams should work together to prevent breaches and develop a crisis response plan to handle potential breaches and safeguard customer/client data.
Know your People
In a volatile job market and uncertain economic climate, employees can be both a significant risk and a great asset. Employers should know exactly who and how their people are engaged and pay close attention to all employee and contractor contracts. Bringing in legal help to make sure all contracts are watertight and have clarity on expectations on both sides is worthwhile. Legal support will also be useful navigating any legislative changes coming in with Labour’s new Employment Rights Bill.
Any employer will be keen to retain its best staff members to help them through the many challenges. HR and legal should work together to ensure employment policies and procedures are in place to attract good candidates and reduce employee turnover.
The current landscape is uniquely difficult for CEOs and executives. Having the support of your own in-house lawyer (fractional or full time) who can horizon scan, mitigate risk and work as a strategic, trusted adviser could help you stay ahead.
