Identifying New & Changing Risk Factors in the Latest 10-K Filings

Using Boardroom Alpha’s SEC filing analytics, we analyzed the latest 10-Ks across US public companies to identify the new and changing risk factors. To do this, the platform analyzes every risk disclosure section to identify rare or never before used words. These novel words can modify existing risk factors (e.g. “rising” interest rates) or expose entirely new risks (e.g. “generative” AI). This method provides potent insights, revealing unique challenges at the individual company level, such as a healthcare grappling with risks related to the banking system when events like the Silicon Valley and Signature Banks occured. Simultaneously, it unveils overarching trends across a spectrum of companies, showcasing the profound impacts of transformative technologies like generative AI.

For this article, we looked across all US public companies that have filed a 10-K in the last 6 months — regardless of size or sector — and broke out the new and evolving risk disclosures into 11 risk factor categories. The table below summarizes the companies, by sector, that identified new and changing risks in each of these categories based on the new novel word analysis.

Quick Links

• Risk Factor Categories
• New Risks by Sector and Company

Risk Factor Categories

Risk 1: Artificial Intelligence (AI)
Risks related to AI abound and are the most widely added in the 10-K risk factors recently. Whether it is the risks of offering AI-based products (e.g. “hallucinations”), how AI could cannibalize the company’s services, creating new Cyber-based risks, or how it could impact the business’s bottom line. If a company hasn’t mentioned this risk yet, it won’t be long.

Risk 2: Banking System
Risks related to the solidity of the banking system, liquidity, and general issues related to the pain and panic that came out of the SVB and Signature Bank debacles.

Risk 3: COVID / Pandemic
While it seems like “old news” these days, many firms have started adding risk factor language in around “resurgence” and similar for COVID-19.

Risk 4: Cybersecurity
Cyber is the threat that will only continue to grow as time goes by. Bad actors never go away, are fully determined, and are getting access to the same types of revolutionary technology, such as generative AI, that is powering growth across industries.

Risk 5: Data Protection Regulations
GDPR was the first big regulation to impact companies, but quickly California followed on and now states like Connecticut and countries like Brazil are following on. Despite there being some acknowledgement that consumer data can’t be continually protected and insurance backstops, the risks associated with holding consumer data are continuing to grow.

Risk 6: Economic
Everyone wants a “soft landing”, but it hasn’t been clear and inflationary pressures are impacting businesses directly in the supply chain and flowing through to their customers.

Risk 7: ESG
In a reflection of the state of ESG, it is seemingly as often mentioned as a risk to reputation or from ESG-stakeholders pressuring around frameworks & disclosures as it is mentioned in managing risks from rising temperatures, extreme weather, and similar.

Risk 8: Financial Reporting
For many, this is a sign of past troubles that will carry forward. Often the risks factors are around the issues from previously disclosed misstatements, remediation efforts, and potential on-going issues.

Risk 9: Reputation Risks
Concerns around brands and how stakeholders are perceiving them which could impact their business going forward.

Risk 10: War / Conflicts
Ukraine, Israel, Russia, the Middle East. Serious geopolitical issues represent real risk across industries.

Risk 11: Workforce
A number of companies are putting a renewed focus and concerns on having the right workforce, with the right skills, and being able to retain them.

List of Companies Citing New Risks