2017 Marsh Panel Counsel Symposium: Risk Perspectives for Boards of Directors

September 26 2017 Marsh Panel Counsel Symposium Risk Perspectives for Boards of Directors TABLE OF CONTENTS 1 On the Edge: Opportunities in a Polarized World 2 John Drzik, President, Global Risk and Specialties at Marsh 2 Preparing for Disruption, Political Risk and Crisis in an Era of Uncertainty 5 BRINK Editorial Staff 3 Climate Change: An Emerging Risk for Corporate Directors and Officers 8 Arati Varma, Head of FINPRO Practice, Singapore and ASEAN at Marsh 4 How the Board Can Be a Company’s Strongest Strategic Asset 10 Peter Gleason, President of National Association of Corporate Directors 5 Six Ways to Ensure AI Creates Jobs for All, Not Just a Few 13 Stephane Kasriel, CEO of Upwork 6 How a 10-Minute Conversation with a Machine Saved $12 Million 16 Colin Parris, Vice President for Software Research at GE Global Research 7 T-Minus 11 Months for EU Privacy Regulation 18 Omer Tene, Vice President of Research and Education at International Association of Privacy Professionals 8 Cybersecurity Regulation on the Rise: Is Your Company Prepared? 21 Pamela Passman President and CEO of Center for Responsible Enterprise and Trade 9 Five Principles for Stronger Board Oversight of Cybersecurity 24 Robyn Bew, Director of Strategic Content Development for the National Association of Corporate Directors 10 EU’s New Data Regulation Requires Action Now 26 Peter J. Beshar, Executive Vice President and General Counsel for Marsh & McLennan Companies 11 The EU’s New Data Regulation Creates Opportunity for Change 29 Peter Johnson, Cyber Leader for Marsh UK 12 Taking Charge of Disruptive Technology Risks 31 Brian C. Elowe, Managing Director and U.S. Client Executive Practice Leader at Marsh 13 Disruptive Technology Brings Risk and Opportunity to Infrastructure Projects 35 Adrian Pellen, Infrastructure Segment Leader, U.S. and Canada, Construction Practice at Marsh 14 Why Asian Infrastructure Needs Multilateral Development Banks 38 Ryan Soon, Senior Research Analyst at Preqin Tom Carr, Head of Real Assets Products at Preqin 15 How Banks Can Keep Up With Digital Disruptors 41 Scott A. Snyder, Senior Vice President, Managing Director and Chief Technology and Innovation Officer for Safeguard Scientifics 16 Reimagining the Pharmaceutical Sales Representative Model in Asia 45 Joseph Mocanu, Principal and Practice Lead, Life Sciences and Digital Health, Asia-Pacific at Oliver Wyman 17 Rising Migration Demands “Roaming” Health Coverage 48 Eduardo P. Banzon, Principal Health Specialist, Sustainable Development and Climate Change Department at the Asian Development Bank 18 Fintech in China: What’s Behind the Boom? 50 Cliff Sheng, Partner and Head of Financial Services, Greater China at Oliver Wyman Jasper Yip, Engagement Manager of Financial Services, Greater China at Oliver Wyman 19 A Rapidly Evolving Risk Landscape: What has Changed for Risk Managers? 54 Lutfey Siddiqi, Visiting Professor-in-Practice, London School of Economics and Adjunct Professor at the National University of Singapore/Risk Management Institutek 20 Can Emerging Market Multinationals Become Global Leaders? 56 Lourdes Casanova, Senior Lecturer and Academic Director of Emerging Markets Institute, Johnson School of Business, Cornell University INTRODUCTION The articles included in this publication were selected for the ways in which they examine global risk issues critical for boards of directors. They provide key insights into ongoing and emerging risks in the geopolitical, regulation, and emerging technologies and cyber areas, as well as more traditional economic risks. These articles also highlight opportunities available to companies best positioned to take advantage of them. This report was prepared for Marsh’s 3rd Annual Panel Counsel Symposium. As the first and only broker developed Panel Counsel initiative, the Marsh Panel Counsel is a unique approach to retaining top tier legal talent for investigations and litigation on an optional, pre-approved basis, providing Marsh clients with benefits that extend beyond the insurance relationship. The Panel Counsel initiative is designed to foster collaboration between Marsh, its clients, insurers, and law firms. All articles first appeared on BRINK, the digital news service of Marsh & McLennan Companies’ Global Risk Center, managed by Atlantic Media Strategies. BRINK gathers timely perspectives from experts on risk and resilience around the world to inform business and policy decisions on critical challenges. BRINK Compendium 1 GEOPOLITICS ON THE EDGE: OPPORTUNITIES IN A POLARIZED WORLD John Drzik President, Global Risk and Specialties at Marsh Business leaders today must ranging from collapsing trade citizens of Paris, Brussels, Nice, navigate a shifting global landscape agreements to the rising threat Istanbul and elsewhere. Moreover, of risks ranging from geopolitical of nuclear proliferation. cautionary admonishment from tensions to social instability to high-profile visionaries regarding emerging technologies. The shifts On the social front, a number the weakly governed application are creating new threats as well of dynamics are increasing of artificial intelligence amplified as new opportunities. instability. Many citizens the already uneasy public debate in advanced economies are about advanced technologies Two years ago, the confluence struggling with their economic exacerbating unemployment of global risks was pushing the future, facing protracted threats and exposing society to new risks. world toward a tipping point. Since to employment and retirement then, geopolitical pressures have security. Meanwhile, in developing Companies, either alone continued to grow and societies economies, more citizens are moving or collectively, cannot control have continued to polarize. into the middle class, creating new the underlying causes that give demands on their governments that rise to these global risks, but Political shocks and other they have been slow to meet. better awareness of their depth, unexpected events in 2016 were breadth and scope can inform part of a broad geopolitical turn The ever-present threat of plans and processes to address toward protectionism that has terrorism changed its face in 2016 the challenges—and opportunities been building for years. This as the specter of the “lone wolf” —these risks present. has put global cooperation under emerged inside the borders of strain, as seen in developments advanced economies to terrorize 2 mmc.com GLOBAL RISKS causes, which include rising income REPORT 2017 and wealth disparity, a fraught geopolitical environment and The Global Risks Report, prepared disruptive technological change. by the World Economic Forum with The 2017 report also explores the support of Marsh & McLennan the interconnections among risks. Companies and other partners, Social instability was at the center looks at the major threats facing of the web, both increasing and being the world today. increased by a number of major risks. The just-released 12th edition Two major themes dominate of the report highlights the social the 2017 report: growing social and political risks that crystallized and political turmoil and the throughout the world in 2016 emerging technologies of the and examines some of their root Fourth Industrial Revolution. TOP TEN SOCIAL INSTABILITY RISK CONNECTIONS* Source: World Economic Forum, Global Risks Report 2017 TOP 10 SOCIAL INSTABILTY RISK CONNECTIONS SOCIAL INSTABILITY ECONOMIC GEOPOLITICAL SOCIETAL *Global Risk Perceptions Survey (745 responses worldwide): Respondents were asked to identify three to six pairs of the most strongly connected global risks. Thickness of connecting lines corresponds to citation frequency. BRINK Compendium 3 SOCIAL AND POLITICAL to spawn a wide range of potential or the individual programmer who CHALLENGES disruptions to business activity, wrote the initial code? Development from civil disturbance and terrorist in risk governance for AI in parallel Across the globe, people are sending attacks to government policy with its commercial deployment a clear message to political leaders. reversals and regime change. is critical to ensure risk/reward They are hurting, frustrated and As a corollary, companies may also tradeoffs are clear for businesses. angry. They feel let down and they more easily find themselves on the want change. At the ballot box in wrong side of volatile social, political advanced economies, voters have and environmental issues. IMPLICATIONS rejected the political establishment FOR BUSINESS and the status quo, most notably in the UK Brexit vote and the THE FOURTH INDUSTRIAL To thrive in such challenging United States presidential election. REVOLUTION (4IR) times, businesses will need to think Anti-establishment sentiment is also creatively about scenario planning, reverberating across the Eurozone, Technology will continue to play including second- and third- where populist movements sprung a vital role in promoting global order consequences such as likely to life and are gaining momentum in prosperity. New advances are poised government responses and cross- Austria, Belgium, Denmark, France, to increase economic productivity, border impacts. Gaming out plausible Germany, Greece, Hungary, Italy, the provide radical healthcare solutions developments and worst-case Netherlands, Poland and Sweden. and combat climate change, scenarios will provide a baseline for among other benefits. The pace gauging which assets are at risk and Citizens have also taken to the streets of innovation is also creating new the scale of the potential damage.

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