Directors, Officers Face Increased Scrutiny: Willis/Allen & Overy Survey

The threat of regulatory investigations, criminal penalties, and anti-corruption legislation, are among the top concerns for directors and officers, according to a new survey conducted by Willis Group Holdings, the global risk adviser and insurance broker, and international law firm, Allen & Overy LLP.

Willis noted that one in four respondents to the survey—which polled the views of 120 individuals from public and private sector organizations, mostly in the UK—had experienced a claim or investigation involving a director within their company.

Worryingly, more than a third of respondents were unaware of the personal exposure of directors to antitrust enforcement.

In addition, three out of ten respondents did not realize that directors face personal exposure to sanctions penalties, and nearly four out of ten non-executive directors questioned were unaware of sanctions risks.

According to the poll, which is in its second year, the top five risks to directors and officers—ranked by percentage of respondents selecting the risk issue—are:

• Regulatory and other investigations and inquiries, 89 percent
• Criminal and regulatory fines and penalties, 69 percent
• Anti-corruption legislation, including the Bribery Act, 58 percent
• Securities or shareholder claims, 51 percent
• The risk of being sued abroad, 50 percent

When it comes to directors and officers insurance, directors are concerned that:

• There should be clear and easy-to-follow policy terms
• The cost of advice at the early stages of an investigation should be covered
• D&O policies should coordinate with and complement their company’s indemnifications obligations.

Source: Willis Group Holdings plc