Top execs report sharp rise in security threats

A global security report has noted a 42% rise in physical threats against top company executives, forcing many organisations to spend more on extra security for their C-suites.

The World Security Report — compiled by Allied Universal, the world’s biggest security company — surveyed 2,352 chief security officers (CSOs) from 31 countries, representing companies with a combined revenue of more than $25-trillion.

The report contains inputs from 200 global institutional investors who manage more than $1-trillion in assets.

"The threat of violence to senior company executives has increased, according to 42% of CSOs," the report says. "Concerns are growing that societies are becoming more violent and this is spilling over to affect the people and assets of businesses."

Institutional investors surveyed placed a hefty premium on executive protection — the majority of respondents believing internal or external security incidents could affect the value of a publicly listed company by 32%.

"Nearly a quarter (23%) of publicly listed companies surveyed experienced a decline in stock price in the last year as a result of an internal or external security incident," the report says.

On average, companies lost $9m in revenue due to a security incident, it adds.

Regarding physical security, the report notes that institutional investors were even more worried on this score than CSOs.

"[A total of] 92% of institutional investors surveyed said physical security should be a higher strategic priority for businesses, compared to 82% of CSOs. That indicates institutional investors are even more concerned about physical security than those at the forefront managing it day to day."

Christo Terblanche, regional president of G4S Africa, told Business Times more than three-quarters of South African companies reported being targeted by criminal violence in the past year — one of the highest rates globally — with executives increasingly feeling threatened.

While the report noted a 28% rise in physical threats to top executives in South Africa, local companies were found to be better prepared to handle such incidents.

"The [report] shows that 28% of South African CSOs reported an increase in threats of violence toward executives, yet local companies are among the best prepared globally, with higher than average levels of executive protection, threat monitoring and crisis preparedness."

Terblanche said this proactive stance was helping to reduce incidents.

G4S’s methods were "specifically focused around intelligence gathering, planning … [and] what we call journey management, and a lot of other proactive measures to protect executives from being exposed."

Research was carried out between March 2024 and April this year. According to a survey of C-suite executives, 49% had enhanced security procedures, background checks and on-site firearms or explosives screening.

South Africa is replete with examples of companies responding to a heightened awareness of violent crime. In 2022, asset management firm Investec said its remuneration committee approved R2m in personal security spending for each of its executives in the country.

In 2021, Jahyr Abdula — the son of Mozambique’s richest man — and former Vodacom board chair Salimo Abdula were kidnapped on the East Rand. Gauteng-based Mozambican businessman Faizel Charloos was arrested for masterminding the kidnapping, in which millions were paid in ransom money.

Last year, Shamshudeen "Dawood" Faki — one of the owners of Dawood Frozen Foods — was found dead in Brakpan after being kidnapped. In March, businessman Neal Ah-Tow was released after a ransom demand of $1.4m. No ransom was paid.

The survey also highlights economic instability as a security risk, with 44% of CSOs saying this is the top security hazard for the coming year — a similar finding to a 2023 report by security firm Allied Universal.

Furthermore, 78% of CSOs believe geopolitical tensions could compromise the security of supply chains over the next 12 months.

"This emphasises how global affairs can impact corporate physical security, and indicates that supply chains are a vulnerable target .., particularly in transit between manufacturing and distribution centres, which tend to be better protected."

About 63% of surveyed companies said physical security incidents had resulted in a revenue loss of at least 10%. Two-thirds of CSOs expect their physical security budgets will increase in the next year.

"Budget priorities include investment in new security technology and infrastructure (47%), followed closely by employee security training and upskilling (45%), and conducting security risk assessments and threat intelligence analysis (44%)," the report notes.

Terblanche pointed to an increase in online threats, especially hacking of company systems.

Another report — titled "Imperative for Growth", and compiled by Vodacom Business and cybersecurity firm Omdis — found that 80% of South African businesses experienced a cyberattack in the past year.

"Data from Sabric [the South African Banking Risk Information Centre] and the CSIR [Council for Scientific and Industrial Research] shows the country loses around R2.2bn annually to cyber hacks," Terblanche said.

"The World Security Report shows that cyber and online-related incidents can result in losses of up to 20% of a company’s market value following a major security breach or disinformation campaign.

He said many businesses were implementing AI-powered analytics, biometric access control, and conducting training for executives and staff to identify and respond to misinformation.

"We’ve entered an era where the rise of false information — or misinformation and disinformation — is impacting corporate security in a much more robust way than we think. The protection measures and monitoring, and intelligence gathering, are top of mind when it comes to the protection of senior executives."

He said sectors such as mining, energy and logistics have faced targeted threats — ranging from intimidation and extortion attempts to physical attacks and home invasions. These incidents often arose from organised crime, labour unrest or social tensions linked to economic stress.

Thabani Ndwandwe, chief risk officer at Standard Bank, told Business Times that growing concerns of crime among business leaders could, in time, find expression in a sullied investor appetite, leading to the country losing investment and talent.

"Before we talk about investments, the most important thing is that you want people to feel safe, to want to be in the country … Secondly, it’s harder to attract talent, for people to willingly want to come to South Africa and stay if they’re worried about safety. So it’s a very important area just to fix from a crime perspective," Ndwandwe said.

Investors were mindful not just of the personal safety of their executives, but also of the assets they had in a country that could be vulnerable to theft or vandalism, he added.

"If you are ... about to invest in a country, the one thing you want to know is that your investments are safe.

"You want to know that if you’ve bought property, your properties are safe; [if] you’ve got trucks on the road, they can move from point A to point B safely."