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The shock and awe of the global pandemic at the start of 2020 and the subsequent rebound in business in 2021, marked a roller coaster ride for the financial services industry. However, compliance officers were under pressure to adopt annual compliance programs to account for business continuity and other contingency plans. There were operational, financial, and regulatory compliance implications for many financial institutions. This pandemic exposed a number of legacy technology and process deficiencies, along with the need for improved compliance systems at scale.

Regulations continue to be updated throughout the global region, and more so in India where regulators are strengthening policies in areas such as anti-money laundering (AML), data protection, and environmental, social, and governance (ESG) risk. Besides these, a few other areas of corporate governance will take center stage in 2022.

More focus on Cybersecurity Policies

The year 2022 will be marked by increased adoption of technology and digital transformation. In contrast, cyber threats and ransomware incidents will explode due to the rapid move to digitalization, remote work, and greater use of third parties; the focus would therefore be on security measures, incident response, board reporting, and communication.

The ESG will be in the spotlight

Increasingly, corporates around the world are placing a high priority on sustainability, both as part of their company branding strategy and to satisfy shareholders. Modern businesses are expected to do more than just generate profits. Business Responsibility and Sustainability Reports (BRSR), which bring India's reporting on sustainability up to global reporting standards, were issued by SEBI in 2021. It replaced BRR as India's sustainable reporting format. The new format outlines mandatory ESG requirements and policies for the top 1000 listed companies based on market capitalization.

Increased independence to Independent Directors

SEBI  has   tightened  rules  for  appointing  and  removing  independent  directors,  aimed  at strengthening the corporate governance framework. The development assumes significance in the backdrop of the role of independent directors coming under scrutiny for their failure in detecting and preventing corporate frauds and promoter mismanagement. The new rules will be applicable from January 1, 2022. This directive now sets the tone for Independent Directors to play an important role in upholding corporate governance standards in any company.