Kathmandu. It has been revealed that businesses are increasingly facing a high-risk environment due to the rapid growth and compliance of AI, geopolitical risks, and regulation.
This has been revealed by a new research by global law firm Clyde & Co. The new 33-page research study, “The 2026 Corporate Risk Radar: Navigating Risk Without Risk,” draws on the perspectives of 700 global business leaders, including board members, C-suite executives and general advisors from a variety of sectors. It evaluates the risks organizations face in today’s environment and how leaders feel about responding.
“86% of business leaders now consider technical risk to be a high impact,” Clyde & Co said in a press release. That was 46% last year. 72% said geopolitical risks were having a direct commercial impact. That was 49% last year and 85% cited regulatory and compliance burden as a high impact, up from 54% last year. ’
“4 out of 5 organisations report that geopolitical changes are affecting the way they operate around the world,” the statement said.
According to the statement, 6 out of 10 respondents said overlapping was the biggest barrier to managing the complexity of risk effectively. Respondents represent organizations with an average global turnover of $14.7 billion. The results show that risk is no longer treated as a series of isolated challenges. Rather, business leaders are addressing the risks that are increasingly interconnected, accumulated, and triggering critical operational, business and reputational results.
However, despite the mounting pressure, confidence remains. 95% of organizations said they were confident in management’s ability to identify and mitigate significant risks. This indicates that many businesses are continuing to invest in preparedness. However, the environment is becoming more unpredictable.
Geopolitical instability is now having a more direct business impact on businesses. 72% said it was affecting performance. This was up from 49% last year. 4 in 5 said that geopolitical changes, trade policy changes and a changing tariff environment are significantly impacting where and how they operate globally.
The pressure is not expected to subside. 73% of business leaders said that high globalization driven by geopolitical decisions is creating uncertainty. This can significantly impact growth in the next 5 years. While 60% expect escalating conflict and international instability.
The next 12 months will have a significant impact on their business. As a result, organizations are restructuring operations to reduce risk to single markets, suppliers, and jurisdictions.
This year’s research has found the largest increase in technology risk of any class. In which 86% of the leaders rated it as high impact. That was 46% in 2025.
As the pace of AI adoption accelerates, governance is struggling to keep pace. 76% of organizations say that requirements for AI, data privacy and cybersecurity are changing rapidly. However, only 68% have a mature AI governance framework.
This is despite 79% of leaders believe AI and new technologies will significantly impact their business over the next five years.
Regulatory requirements are rapidly expanding across jurisdictions. Which is increasing both the pressure of compliance and the risk of reputational damage. 85% of leaders now rate regulatory and compliance burdens as having a high impact. Last year, it was 54%. While 82% say that regulatory obligations are affecting their organization’s investment and ability to grow their business. –Agency
