Risk.Live Boston 2025: Stronger, More Agile Governance

I spent time with my new InfoPro Digital/Chartis Research colleagues at Risk.Live Boston earlier this year. The event drew a tight, accomplished group of risk practitioners, regulators and economists to discuss the world’s evolving risk landscape. The event was under Chatham House rules, but there are a few key points to share (no attribution).

Market structure disruption and decentralization. The impact of the reversal of the Chevron doctrine by the US Supreme Court in June 2024, and the prospect of an era of deregulation in the US, is a significant unknown. This, along with the implications of trade tariffs, is difficult to factor into today’s credit models, even with significant scenario planning to determine which countries, sectors and credits are most susceptible to deregulation and tariffs, and to what extent.
 
Positive sum game. Our current economic situation is unique, influenced not by a specific regulator, failing market segment or black swan event. It is difficult to model geopolitical risk, and good solutions just don’t exist today (i.e., alternatives to the VIX). While many expect profound implications on market structures et al in the US and abroad, most believe this to be a positive sum game that demands market participation. Outcomes going forward will be more binary, with winners and losers.
 
Deregulation demands stronger, agile governance. In this environment, businesses must increasingly depend on strong internal governance at all levels of the organization – from the boardroom to the C-suite, management and operations. Strong governance is synonymous with growth. As regulatory guardrails move farther away from the highway, huge private sector investments will be needed to fill the gap and support the deregulatory agenda.

Market risks are greatest in the short term. Metrics will stay in place, but capital ratios will most likely change to free up space on banks’ balance sheets. More banking charters, entrants and alternate investments should be expected. Businesses must stay focused on servicing customers while trimming risks, particularly if they can be reversed. Be there for your customers. And for GRC pros, ‘Be there for your board’.

Stronger, agile governance with a focus on resilience. The R in the new GRC is for RESILIENCE. Today, businesses operate with more uncertainty than anyone at the meeting could recall, demanding a greater emphasis on resilience at all levels of the enterprise.

Although secondary to geopolitical risk, according to some, cybersecurity threats remain existential. The recently announced breach at OCC was more of a passing discussion topic. Zero knowledge attacks, enabled by AI and machine learning (ML) hacks, and the impending defeat of most cryptographic protection by quantum computing (‘Q-day’ 2030) were top-of-mind cyber topics for participants.

Join the conversation. We’ll have more on these and other topics throughout the year.