BLG points to tech issues as top business risks for 2014

Canada’s business landscape is a relatively stable one and a good place to operate in for 2014, Borden Ladner Gervais says, but there will be growing areas of risk that organizations must be concerned about for the year ahead – including several technology trends.

In BLG’s second risk assessment for 2014, it identifies the push for equity-based crowdfunding as a concern. “Crowdfunding sidesteps the cost and expense of venture capital and private placements, and it also skips due diligence and other investor protections,” BLG states.

The mention of crowdfunding as a major risk before many provinces have finished considering the issue is a curious one. Final regulations around creating exemptions for private equity crowdfunding of startups could contain limits on what a single investor can put into a company, thereby limiting risk as well. While part of the point of allowing equity-based crowdfunding for startups is to avoid the expensive paperwork and audits required to become certified to receive funding on the traditional investment market, that’s not to say there can’t be some sort of basic steps that ensure accountability for each deal.

Saskatchewan became the first Canadian province to allow equity-based crowdfunding earlier this month, when the Financial and Consumer Affairs Authority announced an Equity Crowdfunding Exemption. It comes with regulations that require both the investor and the business to be located in Saskatchewan, and limits individual investments in a business to $1,500. BLG doesn’t make it clear why it thinks crowdfunding is a major risk concern in 2014, or who will be shouldering that risk, but if the most any individual stands to lose is $1,500, it’s hard to see why it’s a major concern.

The seventh top risk of 2014 will be related to Canada’s Anti-Spam Legislation (CASL) that comes into force July 1. BLG rightfully points out that while individual right to legal action won’t take effect until 2017, businesses that send email as part of regular activities could still be fined by the enforcement agencies to the tune of up to $10 million. Since compliance with existing privacy laws won’t be enough to satisfy the new legislation, BLG advises that organizations act now and be ready for a landscape where a consumer complaint about spam could lead to serious monetary penalties.

The eighth top risk is electronic data, BLG states. Data has perhaps never been spread across such a wide spectrum of locations, BLG reasons, with mobile endpoints multiplying as employees bring smartphones and tablets to work, and corporate data residing in the cloud, company servers, and everywhere in between. Companies’ responsibility to protect employee and customer data will turn into a greater risk next year, BLG says. “Reputational risk is a huge concern, but it would pale in comparison to the damage to the organization if client or employee data were actually compromised.”

Finally, social media rounds out the risks for business. Thanks to one-button syndication tools (such as a retweet) in the hands of every online user, any business can easily be defamed, denigrated, or discriminated against more easily than ever. Businesses must treat social media postings like any other document and consider it a legitimate channel to be served legal notice on, BLG warns.



Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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