Risk and Business Transformation
Risk has become ubiquitous in the modern business environment. It is wide ranging and pervasive.
Globalisation, increased regulation and government scrutiny, sustainability and climate change, operational resilience, market disruption and disruptive tech, extended supply chains, heightened public, political and stakeholder interest, cyber, #MeToo and digitalisation (to name but a few factors) have all brought with them new challenges for business, their Boards and wider management. These challenges often result in businesses seeking, or being forced, to make wider strategic and operational changes and transformations.
We understand that dealing proactively with all aspects of risk is a matter of high priority for business and, as such, we understand the need to stay abreast of, and to evaluate and assess performance in relation to, all aspects of risk. We also understand that risk is not simply to be avoided: for a business to be successful, risk has to be embraced and understood, analysed and managed effectively.
We build trusted and longstanding relationships with our clients and therefore fully understand their business, their strategy and the risks they face.
Our lawyers are multi-specialist, equipped to handle the broadest range of matters that our clients face and to help prevent or deal with them. This versatility, combined with our in-depth knowledge and experience in each of our client’s industries, puts us in a unique position to guide our clients through a complex and changing environment, and the evolving strategies and business transformations that may be required in order to succeed.
Our cross-firm Risk offering comprises experts all across the broad waterfront of risk and business transformation, including: governance, culture, sustainability, responsible business, data, cyber, people, crisis management, global investigations, class actions of all kinds, competition etc. Whatever the matter that may threaten, or threatens, a business, we have experts on hand to assist clients in preventing or dealing with it.
Our trusted and longstanding relationships with our clients enable each of our lawyers to understand each client’s business and to focus on their individual needs. As a result, we are ideally placed to assist our clients with the stewardship of their own risk agenda.
We help our clients identify, understand, mitigate and manage the risks they face.
- Risk Identification
Through our in depth knowledge of clients and their industries we can assist in identifying all types of risk they may face, including external, internal, structural and inherent risks. We can help to analyse the likelihood of those risks manifesting and the potential consequences on a client’s business and its stakeholders if they come to fruition, taking into account the particular risk appetite of that client.
- Identify: external, internal, structural, inherent
- Analyse: likelihood and consequences
- Evaluate: risk appetite
- Risk Mitigation
Risks can be mitigated in various ways, including by establishing positive cultural characteristics in a business, drafting, implementing and monitoring the use of internal corporate governance and other policies and procedures, delivering training at all levels of the workforce, regularly reviewing business structures and implementing good governance procedures. We help our clients with these and other initiatives that mitigate against the likelihood of a risk, and associated crisis, emerging.
- Governance and structure of business
- Internal policies and procedures, and training
- Risk Management
We assist our clients with all aspects of risk management, including reviewing business structures used, drafting and reviewing crisis / incident response plans and manuals and carrying out rehearsals or ‘wargames’.
- Business structures - monitor and review regularly
- Crisis/incident response plans and manuals
- Crisis Management
Not all crises can be prevented. When a crisis emerges, calm and experienced leadership, guidance and advice is required. We provide our clients with immediate Partner support, project management skills and calm, stable leadership when they most need it. We assist with all areas of crisis response, including immediate action plans, regulatory interaction, public disclosures, external and internal communications and interaction with the media and insurers. Our leading investigations practice advises clients on major investigations in the UK and around the world. We also have extensive experience in advising clients appearing before parliamentary select committees and other inquiries.
- Project management and calm, stable leadership
- Lines of communication and clear responsibilities
- Investigation and advocacy
- Attendance before parliamentary select committees
- Regulatory interaction, public disclosures, insurers and media
Good governance is central to running a successful business.
Governance and Culture are important in retaining and motivating employees and customers, raising capital and expanding a business, generating a positive internal culture and developing, and maintaining, a reputation for responsible business. By contrast, insolvencies and other corporate crises can often be traced back to poor governance. Accordingly, governance is an area with ever increasing attention from governments, customers and wider stakeholders.
Our experts advise listed and unlisted clients on their governance arrangements, reporting obligations and relationships with stakeholders and bodies representing institutional investors.
As corporate governance advisers to more FTSE listed clients than any other firm, we understand the issues that our clients face and have the experience to help them anticipate any issues which may arise in the future. With increasing regulation for unlisted companies, we are also able to leverage this experience in our advice to our unlisted clients on their corporate governance procedures. Governance requires a proactive and informed approach and our wealth of experience allows us to anticipate and respond quickly to unexpected developments.
Our experts are working at the forefront of corporate governance, advising our clients on new developments including the latest edition of the UK Corporate Governance Code, audit reform and requirements for large unlisted companies to report on their governance arrangements. We regularly collaborate with the Governance Institute, the GC100 and other leading expert bodies in relation to recent and proposed corporate governance reforms and the implications of those reforms in practice.
Our expertise includes advising on:
- The development of corporate governance regimes
- Shareholder activism
- Sustainability and climate change
- Environmental, Social and Governance (ESG) matters including corporate purpose
- Listing Rules, Disclosure Guidance and Transparency Rules and UK Corporate Governance Code compliance
- Disclosure, reporting and compliance, including AGMs and annual reports
- Remuneration including remuneration policies and reporting
- Board composition and structures, board committees and boardroom challenges
- Directors’ duties and responsibilities
- Senior Managers Regime
- Policies and procedures
As global commerce becomes ever more complex, the risk of disruption is unyielding.
Disruption for businesses does not only mean inconvenience for customers. In regulated sectors, it can have economy-wide impacts and, accordingly, may attract significant fines and penalties for an organisation as well as personal liability for senior management. To mitigate this, businesses and organisations are increasingly expected to have business continuity and operational resilience arrangements in place that are “fire-drilled” periodically.
As trusted advisers who understand the breadth and complexity of our clients’ businesses and sectors, we are uniquely placed to help devise operational resilience arrangements and then oversee their testing and iterative development. Whatever the source of the disruption, whether cyber or climatic, employee or infrastructure, we are often the first phone call our clients make and our teams of experts and multi-specialists are on hand to help with those first 24 hours and the period thereafter.
We have expertise in holistic approaches to operational resilience, with specific focus on:
- Financial stability
- Cyber and data breaches
- Data protection and privacy
- IT infrastructure
- Supply chain and procurement
- Viability statements
By way of example, we have worked with a number of our financial services clients as they grapple with the new priority of the Bank of England, Prudential Regulation Authority and Financial Conduct Authority to strengthen the regulatory framework to promote operational resilience amongst financial services firms and financial market infrastructures.
As awareness of climate change has grown, so too have the resources that businesses dedicate to sustainability and climate change related matters. We view sustainability and climate change as fundamental strategic and operational issues, impacting nearly all business decision making.
Our clients appreciate that these issues cannot be addressed by one part of their business alone. Similarly, we recognise the importance of lawyers across our firm working together and alongside our clients’ other external advisers, including accountants, insurers and technical consultants. This has been central to our work helping clients prepare their strategic reports in the context of new transparency requirements relating to the reporting of risk and the impact of their operations on the environment.
Our multi-specialist approach brings together lawyers who are advising on issues as broad as carbon reporting, the use of matrices in contracts and finance documentation, sustainability drivers in directors’ remuneration packages, due diligence considerations relating to sustainability, renewable energy projects and access to sustainable finance products.
The practice group is set up to ensure that know-how on law and policy is shared, particularly where sustainability concepts have been applied in innovative ways, such as in our sustainable finance work, where we are a market leader. More generally, our lawyers have been advising and training a broad range of clients, including those within the FTSE 100, government departments and think tanks, on integrating sustainability considerations into contractual documentation and business strategy.
While our advice in this area often has a risk management nexus, our clients increasingly view climate change and sustainability related matters as an opportunity to differentiate themselves in the eyes of customers, investors and employees. We are providing our clients across various sectors, including energy, utilities, real estate and retail, with the legal tools to support their work in this area. This has included advising clients on preparing for the ‘energy transformation’ and working with property owners on incentivising tenant behaviour in respect of energy efficiency.
Our key expertise includes advising on:
- Climate related disclosures: As with much of the advice we give in respect of sustainability and climate change, this is unchartered territory for many of our clients and best practice is often still emerging. We give clients practical advice that allows them to comply with their legal obligations, while giving them the freedom to make disclosures that are useful and accessible to stakeholders.
- Climate risk and capital: We advise clients on all aspects of sustainable investment, including their regulatory and prudential requirements as investors and investment managers. This is a complex, fast-moving area, with corporates keen to optimise their investment strategies and reduce their exposure to sustainability risks, while keeping the right side of an ever-changing regulatory landscape.
- Sustainable finance: Sustainable impact investing is now an important driver for many financial institutions. Our financing team supports clients looking to match their positive ESG-credentials with discounted financial products such as green bonds or green loans. We operate across different sectors helping borrowers with their sustainability goals. Notable examples are our work: supporting Derwent London, the first UK real estate investment trust to be granted a green revolving credit facility; advising Unilever on its first green bond, to fund projects related to Unilever’s Sustainable Living Plan; and advising Electrolux on the financing of sustainable projects.
- Climate related litigation: Increased awareness of climate change and the impact of commercial activity on the environment has spurred an increasing number of activist disputes, even in sectors not traditionally associated with environmental issues. Litigation seeking to leverage public and private law rights and duties in relation to climate or environmental damage present a growing risk to businesses. We help clients to identify and address areas of dispute risk, as well as assisting in resolving disputes when they do arise.
- The development and trade of renewable energy: We advise on a full range of renewables projects and issues, including offshore wind, solar, biomass, biofuels and technology conversion. Our work ranges from advising Ørsted on the largest and most ground-breaking projects in the UK offshore wind sector through to providing legal support for solar projects in Africa.
- Insurance issues relating to change in environment: We advise insurers on the impact of climate change on their businesses, from the frequency of extreme weather events on insured losses to the rapidly-changing prudential and societal obligations placed on insurers as investors. Insurers are coming under ever-increasing scrutiny from their customers and regulators – not only to minimise sustainability risk and to protect their capital, but also to ‘do the right thing’ when putting that capital to work.
In their most recent corporate governance review, the Financial Reporting Council warned of a “continuing lack of trust in business”.
Responsible business and appropriate related cultures and behaviours are ever more important ingredients to be a successful business. It is an increasing area of focus for customers, employees and potential future employees, other parts of the supply chain, governments and regulators and wider stakeholders.
We have long known that businesses must contribute to society if they wish to maintain their social and environmental licences to operate, and whether fairly or unfairly held, society’s perception of a business is critical to maintaining that licence.
We now also live in a world of social media and immediate, 24 hour news coverage in which a business or individual’s reputation can change in a matter of hours, often as a result of a risk materialising into a crisis or the (early stage) management of that crisis. Calm, expert leadership and advice at such time is critical.
Understanding the threats to your business and the reputation of your business is not straightforward, but is heavily intertwined with the Risk agenda. We have expertise working with clients whose reputations have been attacked, whether by activist investors, whistleblowers or external agencies or other parties. We advise clients subject to the most high profile disputes and regulatory investigations.
We have expertise across all sectors in understanding what reputational risks our clients face and in helping them to mitigate those risks. When things have gone wrong, we also help clients to address reputational concerns and to rebuild trust.
A growing culture of accountability and increasing regulation means that all businesses need to be prepared to deal with a potential crisis. The ideal situation is to never find oneself in a crisis.
However, risk cannot be avoided and crises can manifest in any number of ways involving any manner of subject, whether external, internal, structural or inherent. A crisis may emerge as a slow drip or a big bang and can be foreseeable or completely unexpected.
Whatever the matter that may threaten, or threatens, a business, we have experts on hand to assist clients to deal with it. We help our clients to plan ahead, so that they are as prepared as they can be if and when a crisis emerges. When a crisis materialises, we are there to help at every stage, from the immediate actions that need to be taken in order to mitigate any harm caused, to any steps that need to be taken post-crisis in order to recover from the crisis.
We have worked with clients on internal investigations, regulatory investigations, parliamentary enquiries and matters involving whistleblowing.
We also advise our clients on:
- Brand reputation
- Investigations by regulatory or professional bodies or government agencies
- Media investigations or leaks
- Sudden unexpected events
- Natural disasters
- Regulatory enquiries
- Client and customer complaints