#systemic-risks

#systemic-risks

The conflict has driven up the price of oil and natural gas; damaged oil refineries, tanker terminals and other energy infrastructure; disrupted shipments of fertiliser that the world's farmers depend on; and damaged the confidence of businesses and consumers.

When we're children, we think in black and white and believe rules are hard and fast. As adults, as life experience kicks in, we begin to understand there are different sorts of rules. We understand that not stealing is a hard rule. We might also understand that 'don't wear jeans to work' means don't wear ratty jeans, or don't wear jeans on days the corporate team are visiting.

There'll be some idiosyncratic risk in there from folks who don't have good credit standards, but I don't think it's a systemic issue. Where it gets a little more concerning would be if the Middle East crisis goes on for a long time, and you see a convergence of the concerns on AI valuations.

I, too, have been having difficulty conjuring up visions of a better future either for myself or in general. I posted this insight on social media in the final throes of 2025, and received many responses. A lot of respondents agreed they felt like they were just existing, encased in a bubble of the present tense, the road ahead foggy with uncertainty.

The dollar has continued to sink, and top investors in Northern Europe are reportedly re-evaluating their exposure to U.S. assets, while Danish pension funds have already dumped Treasury bonds. Part of that is because of concerns over U.S. debt, but Trump's Greenland crisis and his continued unpredictability have also fueled calls for Europe to weaponize its capital. In fact, European investors own $8 trillion in U.S. stocks and bonds, with $3.6 trillion of that in Treasury debt alone.

Rather than stolen data making headlines, it was business stoppage that triggered attention. Moving into 2026, the board's focus should be on ensuring business continuity and building resilience in the face of emerging risks generated by AI usage and attack vectors, quantum computing and geopolitics.

This annual survey of more than 1,300 global leaders and experts shows a fascinating divide in perceptions of short-term and longer-term risks. Most are anxious about physical conflict in the short term, ranking 'geoeconomic confrontation' as the most pressing global risk over the next two years. Misinformation and disinformation came second, with societal polarization coming third. Collectively, economic risks showed the largest jump, with more concerns about an economic downturn, inflation and an asset bubble burst

If this is enacted-and that's a big if, though part of me hopes it is-we would likely see a significant contraction in industry credit card lending. Credit card issuers simply won't be able to sustain profitability at a 10% rate cap,

As audit committees confront a rapidly expanding risk landscape, their role in corporate governance is being reshaped. Boards have often turned to current and former CFOs as independent directors, particularly for audit committees, because of their ability to translate complex operational and financial realities into effective oversight.For example, this month, J. Michael Hansen, former EVP and CFO of Cintas Corporation, was appointed to the audit committee at Paychex.