The risk landscape has led business people, and their legal and compliance teams, to bemoan the business world in which we live. Unsurprisingly, regulatory compliance is the top risk for most industries.

Navigating the risk landscape is now a significant focus of businesses and while traditionally accountant-firm driven, risk advisory services offered by law firms are sought after.

The evolving risk landscape of political and economic events is affected by:

  • the increasing exposure of managing risks in silos;
  • heightening shareholder activism;
  • the impact of risks on other risks;
  • the immediacy of social media scrutiny;
  • globalisation;
  • increasing vulnerability of individual risk;
  • collaboration amongst international regulators;
  • disruption to regulation;
  • expanding oversight of regulators;
  • increasing disclosure and self-reporting obligations;
  • differing methodologies, cultures and customs; and
  • disruption by innovation and technology.

These all result in heightened risk exposure.

Business and legal functions are now more aligned with the C-suite goals. The legal function now includes risk management thus protecting shareholder value and minimizing long-term reputational damage. In that regard seeking appropriate legally protected risk advice is strategically important.

One way for a business to address these often complex risk issues is for specialists to collaborate across the boundaries of their expertise. Norton Rose Fulbright’s international risk advisory practice is one of the first to legal market that provides strategic analytic risk management across geographies, business operations, areas of law and risk areas.

Our risk advisory practice appreciates that risks are interconnected and often have a domino effect. One incident can lead to follow-on consequences and loss of confidence across multiple issues and parties. A single incident can, for example, have negative consequences for the press, investors, regulators, insurers, commercial counterparties, employees, contractors, lenders, debt rating agencies, equity analysts, government and shareholders.

In an evolving business and legal world, legal counsel will in time (and shorter than you think) be thought of as risk advisors as much as anything else.

An ever-increasing issue and priority for businesses should be human rights, including sustainable health and safety, labour standards, questions of stakeholder engagement, international trade obligations, and anti-corruption regulation.

The ongoing public revelations in South Africa about public and private governance failures and suspected corruption has led to a number of substantial mandates in which our clients have been obliged to investigate numerous regulatory and risk management issues in the context of evolving internal and regulatory investigations.

The trend towards enhancement of anti-corruption legislation, alongside more determined enforcement action, has changed, and will increasingly change, the regulatory environment for corporates.

The recent and ongoing developments in South Africa have underscored the importance and value of appropriate pre-transactional, implementation and post-transaction due diligence investigations and assessment as an essential risk management tool.