Socioeconomic fault lines exposed by COVID-19 are creating an unforgiving marketplace, with companies under scrutiny from governments and the public and little room to avoid disputes and investigations into business practices and behavior, according to a new report from FTI Consulting
The Washington, D.C.-based business consulting firm’s 2021 Resilience Barometer report surveyed more than 2,800 executives from major public and private companies across G-20 nations to analyze views and practices regarding risk management. This year’s installment finds that companies are under extreme pressure to integrate technology (41 percent), strengthen reputations (37 percent), improve ESG/sustainability practices (34 percent) and improve corporate culture (29 percent) in the next 12 months. FTI also found that 83 percent of organizations are being investigated or expect they will be in the next 12 months.
The top three investigation worries are: business conduct and the treatment of customers, sustainability and ESG practices and the relationship with public bodies and government contracts. Thirty percent of respondents identified each of these areas as leading concerns. The services sector and financial sector were the most likely to report experiencing regulatory or political scrutiny over the past 12 months (23 percent each).
“The ability of businesses to handle crises has been a defining factor of their success during the pandemic,” said Caroline Das-Monfrais, senior managing director at FTI Consulting. “However, COVID-19 has exposed and exacerbated economic and social fault lines — employee wellbeing, talent shortages, treatment of customers, financial crime and cybersecurity all have risen up the corporate agenda, and businesses are responding to protect value and build resilience as they look towards future growth.”
Other key findings:
- Growing cybersecurity threats: Seventy-eight percent of companies surveyed suffered a cyber attack in the past 12 months, with a rise in phishing attacks among the most prevalent type (34 percent). Breaches are increasingly damaging, with 32 percent experiencing a loss of customer/patient data and a further 30 percent reporting a loss of third-party information.
- Class actions and mass consumer claims: Thirteen percent of respondents experienced these in the past 12 months, and the same percentage expect this to continue in the next 12 months. One-third strongly agreed that class actions or mass claims are becoming more costly for their business, with 17 percent of legal costs expected to be spent on settlements from class actions and other disputes.
- The Great Resignation: Over the past 12 months, 30 percent of companies surveyed have experienced a shortage of talent and skills, and 68 percent have reported increased mental health issues in their workforce since the start of the pandemic. Unsurprisingly, 30 percent are under “extreme” pressure to retain talent, and 29 percent are under “extreme” pressure to improve corporate culture in the next 12 months.
FTI Consulting’s 2021 Resilience Barometer survey incorporated the views of 2,869 decision-makers in large companies across all G-20 countries. Large companies are defined as those with over 250 employees, over $50 million in annual global revenue or with a balance sheet of over $43 million. In July 2021, FTI Consulting conducted a quantitative survey with C-suite and senior managers executives from privately owned and publicly listed companies. In total, participating companies employ 58 million people, with each company employing an average of 20,000 individuals.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm with more than 6,400 employees located in 29 countries. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.