CCI staff share recent surveys, reports and analysis on risk, compliance, governance, infosec and leadership issues. Share details of your survey with us: editor@corporatecomplianceinsights.com.
Few corporate leaders confident in their integrated reporting
Three-quarters of business leaders say effectively communicating their organization’s sustainability efforts is critical for investor relations and liquidity, according to new research from Forrester Consulting and Workiva.
The survey of 1,026 global finance, accounting, ESG, sustainability, audit, risk and compliance leaders found that 84% of organizations need significant technology improvements to achieve assured integrated reporting, with only 9% confident their current tools will meet their needs in 18 months. A majority (57%) of respondents report difficulties collecting trusted ESG data.
Other key findings:
- 68% of organizations not required to adopt Corporate Sustainability Reporting Directive (CSRD) standards plan to do so voluntarily.
- 61% are heavily reliant on manual tools and workflows for cross-functional reporting.
- 81% believe AI will meaningfully improve reporting and audit/risk processes over the next two years.
- 77% describe their organization’s reporting and audit/risk processes as value centers.
Insolvency risks, geopolitical tensions set to roil D&O landscape in 2025
Global business insolvencies are expected to rise 11% in 2024, creating heightened risks for directors and officers, according to new research from Allianz Commercial. The insurer’s annual report on directors and officers (D&O) insurance highlights increasing exposures from bankruptcies, geopolitical upheaval and artificial intelligence.
Major insolvencies increased 26% year-over-year in the first three quarters of 2024, with Western Europe leading at 195 cases, followed by Asia-Pacific (67) and North America (66). Companies and leaders face potential claims from lenders seeking to recover funds or shareholders alleging breach of fiduciary duty.
“The D&O insurance market has remained competitive for buyers over the past year, but loss potential is still high,” says Vanessa Maxwell, chief underwriting officer at Allianz Commercial. “We are seeing regulatory bodies across the globe step up scrutiny of corporate conduct, making D&Os more vulnerable to investigations, penalties and lawsuits.”
Other key findings:
- Securities class actions are rising in Europe (+10% year-on-year) and Australia (+43%).
- The litigation funding industry is projected to grow nearly 10% CAGR through 2028.
- “AI washing” — exaggerated claims about firms’ technological capabilities — is emerging as a new litigation risk.
- Countries accounting for over half of global GDP will see double-digit insolvency increases in 2024.
Shareholder proposals demanding binding director majority voting surge
Shareholder proposals requesting binding majority voting for corporate directors increased 13-fold in 2024, signaling a significant shift in how U.S. investors view corporate governance, according to new research from MSCI. The surge in proposals aims to require directors to resign immediately if they fail to receive more than 50% of votes in uncontested elections.
Of 206 governance-related proposals submitted to companies in the MSCI USA Investable Market Index in 2024, a quarter called for implementing binding majority voting — more than any other single category. These proposals received an average of 54% votes in favor, up from 44.1% over the previous five years, with some garnering up to 99% support.
The research also revealed a strong connection between governance practices and financial performance. U.S. companies with top governance scores outperformed their lowest-scoring peers by 26% in cumulative returns between 2018-223.
Other key findings:
- Only one in five rejected directors actually resigned after failing to receive majority support in 2024.
- Companies lacking binding majority voting were more likely to have other governance-related risks.
- The total number of shareholder proposals actually decreased in 2024 to 569, down from 605 in 2023, highlighting the specific focus on voting rights.
