"Fast-Rising Risk Factors Offer Signs of the Times" from Intelligize reveals the instructive findings of its analysis of the 100 most commonly cited risk factors in Form 10-K filings over the past year and, among those, the risk factors that experienced the greatest increase in citations over that time period.
The five most commonly cited risk factors are:
- Failure to compete effectively (4,624 cites)
- Dependence on employees (4,454 cites)
- Business (miscellaneous) (4,434 cites)
- Cybersecurity, data privacy, and informational technology (4,180 cites)
- Operational disruptions (3,631 cites)
Of the top 100, the number of citations increased the most for:
- International trade restrictions and protectionism (802 cites - up 68%)
- Employee misconduct (653 cites - up 19%)
- Anti-corruption law (653 cites - up 17%)
While the spike in trade-related risks is not surprising given the significance of this issue in the current administration and associated potential business impacts, the nearly 20% rise in employee misconduct risk factors shows how quickly these types of formerly hush-hush concerns have manifested in public disclosures.
See e.g., these recent articles from CNN: "Premarket stocks: Companies aren't ready for the trade war to get worse again," CNBC: "Trump says it might be better to wait until after 2020 election for a China trade deal," and the WSJ: "U.S. Stocks Slide After Trump Signals Further Delays to China Deal," "Stocks Close Lower on Manufacturing Report, Fresh Trade Tensions," "Trump to Levy Tariffs on Brazil, Argentina," "China Raises Hopes for U.S. Trade Deal," "Dollar Tree Gets Squeezed by Tariffs"; our recent reports:"'Wildfire' Risk Factors on the Rise," "Risk Factors: Worker Classifications," "Risk Factor Disclosures," and "Risk Factors: Artificial Intelligence"; and additional information & resources on our Financial Reporting page. This post first appeared in the weekly Society Alert!