Companies often delay escalating legal, regulatory and reputational risks because business teams prioritise growth targets and operational milestones, while employees may hesitate to report concerns for fear of being held accountable, general counsel said.
Vasant Shelke, General Counsel at Emaar India, said risk escalation practices vary significantly across Indian organisations, with many continuing to operate through compartmentalised structures rather than embedding legal and regulatory risk monitoring into everyday business operations.“In India, the approach to risk escalation varies significantly from one organisation to another. Unlike mature international models where legal and regulatory risk monitoring is deeply embedded into daily operations, many Indian organisations still operate under a compartmentalised mindset,” Shelke said.He pointed to a business-centric approach in which growth targets, operational velocity and commercial milestones tend to take precedence, with emerging legal, regulatory and reputational risks often viewed as secondary concerns or administrative hurdles rather than critical enterprise threats.“There is frequently a laid-back approach towards latent risks. Operational teams often defer action or escalation until a potential issue escalates into an active crisis, regulatory notice or dispute,” he said.Shelke also highlighted the tendency among middle management to delay reporting early warning signs in the hope of resolving issues internally, without involving the legal function.“Unless a risk escalates directly to top-level leadership or manifests into a severe operational bottleneck, intermediate management tends to underreport or delay flagging early warning signs, hoping to resolve matters internally without invoking legal oversight,” he said.To address these structural and cultural barriers, Shelke said general counsel need to move beyond a reactive advisory role and become proactive strategic partners, with the authority to escalate concerns directly to executive leadership and board-level committees.He said organisations should establish formal legal and regulatory sign-offs at critical business gateways, including project milestones, product launches and strategic initiatives, to identify risks before they develop into operational bottlenecks.Anupriya Garg, General Counsel – India and Company Secretary at Kennametal, said employees’ reluctance to escalate issues and their tendency to wait for complete information can allow manageable concerns to grow.“I believe one of the biggest challenges is that people often hesitate to escalate an issue, either because they feel it can be handled at their level or because they are concerned about being held accountable. Sometimes, there is also a tendency to wait until all the facts are clear, by which time the issue may have already grown,” Garg said.She said organisations need to create an environment in which employees feel encouraged to speak up and seek guidance at an early stage, rather than viewing escalation as a sign of failure.“The important thing is to create a culture where people are encouraged to speak up and seek guidance early, without looking at escalation as a sign of failure. General Counsel should be closely connected with business teams and involved in discussions at an early stage, rather than being approached only when a problem has become serious,” she said.Garg added that timely communication gives companies more options to address concerns before they develop into larger legal, regulatory or reputational issues.”In my experience, early communication and timely intervention can make a significant difference. It gives the organisation more options to address an issue before it develops into a larger legal, regulatory or reputational concern,” she said.Early escalation versus fear of overreactionThe emphasis on early escalation is also reflected in international research. Three-quarters of general counsel and other senior legal decision-makers surveyed in Singapore preferred escalating emerging risks early, even when an issue might subsequently prove manageable, according to research sponsored by FTI Consulting.More than half of the Singapore respondents identified immediate legal or regulatory exposure as an important factor in determining whether an issue should be treated as a crisis.The findings also point to the growing role of technology in identifying emerging risks. About 62% of respondents in Singapore said they used artificial intelligence-enabled systems to monitor external risk signals, compared with 46% globally. Another 64% used automated alerts to identify emerging risks, against 53% of respondents globally.However, technology adoption has not eliminated information gaps. About 46% of Singapore respondents said information arriving too slowly impeded effective prioritisation when several serious issues emerged simultaneously, compared with 33% globally.The possibility of overreacting to an issue also remains a concern. About 52% of Singapore respondents said fears of overreaction or a potential loss of credibility limited their ability to raise an issue with senior leadership, higher than the global figure of 42%.A lack of sufficiently robust evidence was another obstacle, cited by 48% of Singapore respondents against 38% globally.For Indian companies, the challenge is therefore not merely to establish formal reporting mechanisms but to ensure employees and business teams are comfortable using them.The inputs from Indian general counsel point to the importance of embedding legal teams into business decisions, creating clear escalation routes and ensuring that raising an early warning is treated as a preventive measure rather than an admission of failure.As businesses face increasingly interconnected legal, regulatory and reputational risks, the ability to identify and communicate concerns before they escalate could become an important part of corporate risk management.
