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Breach of human rights within or by business operations has risen from a niche concern by Directors and Officers in 2021 to a leading area by 2025.

That was the takeaway from Willis – a WTW business, in collaboration with Clyde & Co., in its latest Directors and Officers Liability Insurance Survey.

In the survey, released this week, 62% of responders said they consider human rights breaches to be of very or extremely important concern in 2025 compared to just 23% in 2021.

Similarly, concern about supplier business practices has risen from 27% in 2021 to 59% in 2025.

"New risks for directors and officers that were added to the survey this year included

diversity, equity and inclusion (DEI); and geopolitical risk."

In the survey, 80% of directors and officers said they considered health and safety risks to be very important or extremely important to their organisation. Physical workplace risks were deemed the most important by 43% of respondents, followed by employee mental health and wellbeing consequences stemming from work (28%) and from personal matters (12%).

For the first time since 2018, civil litigation and third-party claims were included among the top seven concerns, said the report. It specified that 63% of directors and officers surveyed considered these significant risks to their Directors and Officers. Smaller organisations (<$50 million in revenue) and those with revenues between $1 and $5 billion mentioned litigation more often.

The largest organisations surveyed (>$5 billion in revenue) included diversity, equity, and inclusion as well as bribery and corruption as top risks while excluding financial distress, bankruptcy, and insolvency concerns of smaller organisations.

What did the survey cover?

The annual survey featured a diverse range of global companies in diverse industries and sizes. For-profit, private companies are the most represented, accounting for 56% of the respondents, followed by for-profit, listed companies at 32%.

In terms of revenue, 33% of the companies have revenues between $0 and $50 million, and another 33% have revenues between $50 million and $1 billion. The services industry makes up the largest proportion of respondents followed by transportation and retail and finance and insurance. 

Finance and insurance made up 19% of the respondents.

New risks for directors and officers that were added to the survey this year included diversity, equity and inclusion (DEI); and geopolitical risk. “Both of these have immediately seen significant results, with DEI making its way into the top seven risks for some regions,” said Angus Duncan, Global D&O Coverage Specialist (ex NA), Willis, in the report.

“[It’s] interesting to see AI still being ranked so low - in terms of skills and knowledge

of the board, where more time is needed and materiality to the business."

In one key area that was also relatively new to the survey, boards of directors were asked “To what extent do you agree that your fellow board directors have the necessary skills and knowledge to provide effective oversight of each of the below areas?” with a variety of options. The most common was around Financial performance monitoring and reporting and the lowest was on Artificial Intelligence (AI) with just 48% thinking colleagues and peers had the necessary skills.

“[It’s] interesting to see AI still being ranked so low - in terms of skills and knowledge of the board, where more time is needed and materiality to the business,” said Duncan. “This is consistent with how AI is ranked as a risk for directors as well where it appears in the bottom half of risks.”

He added it was “surprising” that more people don't consider AI to be a material risk to the business or” something they should be spending more time on”.

The human rights breaches concern also directly affects many fund operators and those in asset management due to the complexity of supply chains and oversight in the area.

Last year, Christophe Lemarie, Chief Operating Officer - Client Experience and Strategy, Executive Committee, TOBAM, told Fund Operator that “[A] potential risk for the asset management industry that we foresee, with possible negative impact for investors, is the fragmentation of the market due to different ESG regulatory frameworks defined and implemented by the different local regulators”.

This could now be seen to be happening as D&Os show concern for possible breaches – especially around rules that differ nationally and are complex and difficult to understand at times.

“More local ESG constraints and local specificities means less efficiency for us and clients as cross-border products might not be able to match all constraints at the same time,” said Lemarie.

Building onto this is the DEI factor. Last year, the Fund Operator also reported on how the proportion of US corporations using a DEI metric to set compensation has dropped to 28% from closer to 33% in 2023.

However, the report mentioned that stepping away from DEI could put the companies at odds with employees and the wider public, which largely support many of the goals.

This means that these two factors – DEI initiatives and supply chain issues around potential human rights breaches – will be key going forward for operations staff and that they must fully understand the complexities.

 

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