Business Hot Buttons in 2022

From the onset of the global pandemic, business communities have received shockwave after shockwave, resulting in a constantly evolving landscape. Despite the seemingly moderate progress, corporate leaders must overcome various challenges for success in 2022 before they are able to establish a new work environment.

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In February 2021, I was invited to present my views on ‘What CEOs and practitioners should care about in 2021’ at the Inaugural Risk Regulatory Outlook 2021 hosted by the Bahamas Institute of Financial Services and Next Level Solutions. At that time, I implored the audience to (1) Evaluate their corporate structure to ensure that they are strategically aligned, (2) Place a greater emphasis on regulatory change management, and (3) Ensure sufficient attention is channelled towards human capacity management to avoid disruptions.

?As it relates directly to boards of directors, by mid-year 2021, Harvard Law School Forum on Corporate Governance reported, “As we emerge from the pandemic, boards and management teams should continue to assess their corporate purpose, strategy, risk management procedures, and board committee structures to optimize their ability to deal with the ever-proliferating number and complexity of business risks and opportunities they must navigate”. Their release dated June 28, 2021, noted that research had confirmed over 15 hot button areas for c-suite executives and senior management that included, (1) Pressures on corporations to take public positions on controversial legislation and political or regulatory matters, and activities and disclosures regarding lobbying and other political spending; and (2) Human capital management (including wages, safety, health, training, retraining and retirement benefits) and related disclosure issues. Additionally, as we fast forward to January 6, 2022, Kramer Levin Naftalis & Frankel LLP reported that in the USA alone, “2021 was a busy year for corporate governance matters, with new legislation passed early in the year and new enforcement priorities emerging under the Biden administration.”

?Against this backdrop, I will venture again to identify areas that businesses should consider as priorities in 2022.

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Human Capital Recalibration

Workforce relationships will be top of mind for institutions. Hard decisions are looming regarding vaccinated versus unvaccinated employees with major Wall Street banks such as Citigroup already announcing that for US-based operations, as of January 14 it will place all unvaccinated employees on unpaid leave with a plan to end work engagements by the end of January 2022. Moreover, board of directors will toggle with stepping beyond oversight responsibility for workforce culture as an organizational asset. Michael Peregrine, Forbes senior contributor explained that ultimately, one of the greatest challenges will be to support and guide management in responding to the circumstances that prompted the "Great Resignation," and their impact on employee commitment to the traditional work ethic.

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Vendor Risk Management

In vendor risk management (VRM), service providers or IT suppliers are scrutinized to ensure that they don't create unacceptable disruptions or adverse impacts on business performance. As the digital business world continues to evolve, it's essential that institutions understand the forces that will shape thier future. Due to accelerated digital transformation, institutions are now reliant on multiple third-party vendors. These relationships require secure, transparent and adequately monitored contracts and service level agreements to ensure risks such as cybersecurity are sufficiently managed. In fact, Gartner forecasts that by 2025, 60% of companies will use cybersecurity risk as a main element of how they conduct business deals with third parties.

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KYC-AML Alternate Data Solutions

In the KYC space, data quality problems are often cited as a cause of huge amounts of false alerts, time-consuming investigation, customer reviews, and inaccuracies in risk profiles.?Thus, using external data to augment financial institutions' internal data about customers and their behaviour has become a popular topic of discussion and will continue. A 360-degree view of an existing or potential customer's digital footprint can be collated, assessed and correlated in real-time with alternate data.

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Conclusion

In short, these and other hot button topics are likely to influence the manner in which companies function to maintain and grow their market share.

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