As we step into 2025, the business world finds itself grappling with new and far-reaching regulatory changes. These shifts, driven by the evolving demands of governance, security, and operational resilience, mark a critical moment for companies across the globe to reassess their compliance frameworks and risk management strategies. Among the most notable changes are the updated Corporate Governance Code in the UK and the enforcement of the EU’s Digital Operational Resilience Act (DORA), two developments that are set to reshape the way businesses navigate both domestic and international markets.
In the United Kingdom, the revised Corporate Governance Code became effective at the start of the year, marking a significant update to the governance landscape. This update is especially important for listed companies, as it introduces new disclosure requirements related to internal controls and risk management. These requirements aim to improve the transparency and effectiveness of corporate governance practices, ensuring that companies are better equipped to manage risks and maintain accountability to shareholders. The changes are designed to reflect the increasing complexity of global markets and the growing expectations for businesses to demonstrate not only financial success but also strong ethical standards and resilience in the face of uncertainty. With these new regulations, companies will need to adopt more rigorous internal controls and provide more detailed reports on their risk management frameworks, which could have a profound impact on their operational practices and strategic decisions.
Simultaneously, across the English Channel, the European Union has ushered in the Digital Operational Resilience Act (DORA), a regulation specifically aimed at enhancing the cybersecurity and operational resilience of financial entities. The enforcement of DORA is seen as a direct response to the increasing sophistication of cyber threats and the growing importance of digital infrastructure in the financial sector. The legislation mandates that financial institutions establish robust frameworks for ensuring their operations remain secure, resilient, and capable of withstanding any cyber threats or operational disruptions. It also stresses the need for continuous monitoring and reporting of risks related to technology systems and third-party providers. With this new law, the EU seeks to create a more secure and reliable financial ecosystem that can withstand the pressures of an increasingly digital and interconnected world. Financial institutions, in particular, will have to invest in strengthening their IT infrastructures and enhancing their cybersecurity protocols to comply with DORA’s stringent requirements.
The ripple effects of these regulatory changes are expected to be felt worldwide, as they prompt businesses to revisit their compliance strategies, adapt to new governance standards, and reinforce their digital resilience. As companies navigate these new frameworks, they will face both challenges and opportunities. While compliance will require time, effort, and resources, the long-term benefits include enhanced operational security, better risk management practices, and a more transparent and accountable corporate culture. These regulatory shifts are a clear signal that businesses must evolve to stay ahead in a rapidly changing global landscape.