Class actions have become a recognised enterprise risk, shaped by cyber incidents, regulatory scrutiny, shareholder expectations, ESG obligations and emerging technologies. Organisations can’t afford to view them as isolated legal events.
Our survey of senior legal, governance and risk professionals across corporate Australia reveals a clear shift: class action risk is increasingly viewed as a Board-level issue requiring stronger governance, oversight and organisational readiness.
The boardroom shift
Our survey confirms what many directors already sense intuitively: class action risk is broadening, and the governance questions it raises are becoming more complex. Over half of the organisations we surveyed rate their concern about class action exposure at 4 or 5 out of 5, a figure that reflects the reality of an increasingly active litigation environment.
What has changed is the nature of the risk itself. Cyber breaches now routinely trigger parallel regulatory, shareholder and consumer proceedings. ESG commitments are crystallising into enforceable obligations. Derivative actions are re-emerging as a tool for shareholders to test board decision-making. While only 33% of participants identified AI risk as a current concern, AI issues are generating the kind of overseas litigation that has historically found its way to Australia within a few years.
The survey suggests there is an opportunity for boards to bring greater structure to how class action risk is assessed and monitored. At present, many organisations address it within broader risk or compliance categories rather than as a discrete item. Sixty percent of respondents reported that their board or senior executive team does not receive regular dedicated briefings on class action exposure. As the risk profile evolves, there is a natural case for governance frameworks to evolve with it.
Directors may wish to consider whether their current governance arrangements provide sufficient visibility over class action trends, including whether board materials and disclosure processes are designed with litigation resilience in mind, and whether the organisation is actively monitoring overseas developments that may signal where Australian claims are likely to emerge next.
In our experience, the organisations best positioned to manage this risk are those that treat class action preparedness as a standing governance consideration and ensure that their frameworks are updated and relevant to the businesses shifting risks. For boards willing to engage with these issues proactively, the dividend is risk mitigation and confidence in the quality of governance.
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