Forecasting the Regulatory Landscape: Top Challenges and Opportunities for Businesses in 2024
December 28, 2023
Regulatory legislation evolves constantly, compelling senior leadership to reassess and adapt existing programs in response. These changes, though overwhelming, present organizations with an opportunity to refine their operations for long-term success. Europe, in particular, has witnessed transformative regulations, such as the German Supply Chain Act, EU Whistleblower Protection Directive, NIS2 Directive, and Corporate Sustainability Due Diligence Directive (CSDDD), according to an article by NAVEX.
Here are some highlights from their 2023 NAVEX Next session, “Key Regulatory Risks for Business to Navigate in 2024,” which focuses on supply chain due diligence, cybersecurity threats, and anti-corruption laws, giving insight into the regulatory challenges that lie ahead.
In Europe, supply chain due diligence is a critical focus, with anticipated changes in 2024 addressing human trafficking and modern slavery. Sanctions enforcement is evolving, with higher penalties, individual prosecutions, and a commitment to ethical practices in the EU’s supply chains.
The cybersecurity landscape poses a range of threats, including ransomware, cloud security concerns, and evolving DDoS attacks. Legal requirements, influenced by GDPR, emphasize the importance of third-party cyber risks. Challenges in cybersecurity implementation include staff shortages, budget constraints, and the need for automated solutions. As AI evolves, regulatory responses like the EU AI Act stress the importance of information governance, data classification, training programs, and collaboration with IT departments for responsible AI development.
The European Commission proposed an anti-corruption package in May 2023, aiming to strengthen efforts against corruption. Measures include robust rules, an EU network against corruption, and Common Foreign and Security Policy sanctions. Companies are urged to adapt compliance programs to align with impending changes.
The EU Whistleblower Protection Directive, introduced in 2021, enhances safeguards for individuals disclosing violations or misconduct, ensuring accessible reporting avenues and protection from reprisals. In navigating these regulatory transformations, organizations must proactively adjust compliance programs, compensation structures, and consequence management systems.
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