Aon | Professional Services Practice
Emerging D&O and EPL Risks for Advisory Firms
Release Date: March 2026Advisory and consulting firms face a fresh wave of risk as AI, data driven tools and changing workplace expectations reshape both corporate governance and employment practices exposures.
Key Takeaways
- Factors including AI, evolving workplace practices and investor/creditor disputes are reshaping the D&O risk of advisory and consulting firms.
- Changing workplace models and use of AI algorithms may lead to additional Employment Practices Liability exposures, with regulators and plaintiffs focused on transparency, fairness, and human judgment in employment decisions and HR policies.
- Aligning technology adoption, people practices and board level oversight is crucial to avoid both corporate governance failures and employment practices litigation.
AI, Technology and Data Governance at the Board
AI is now part of client service, with Generative AI, analytics platforms and third-party tools embedded in research, valuation support, modeling and written work product. Regulators, courts and clients are increasingly focused on how boards oversee technology and privacy risks:
- Corporate governance expectations – Directors may face allegations that they failed to properly implement responsible AI guardrails or a robust AI governance framework in addition to allegations of lack of quality control, bias and safety testing. Firms may also face regulatory scrutiny relating to privacy, discrimination, and consumer protection.
- Cyber, privacy and data incidents – For firms holding client and employee data, a cyber event can quickly become a board level allegation that security, vendor oversight and disclosure controls were inadequate.
Plaintiffs and regulators are likely to ask: what visibility did the board have into AI use, privacy and data governance, and were risks appropriately managed, monitored and mitigated?
Algorithms, Hybrid Work and Culture
As firms refine hybrid and return to office (RTO) policies, evolving workplace models may contribute to emerging risks:
- Allegations that RTO rules disproportionately impact caregivers, people with disabilities or other protected groups, leading to discrimination, failure to accommodate or retaliation claims.
- Increased use of monitoring tools including keystroke logging, webcam monitoring, time tracking and communication analytics, with employees alleging invasion of privacy, discriminatory discipline based on opaque metrics, or retaliation tied to monitored communications (e.g., union discussions or whistleblowing).
These risks are amplified when monitoring and productivity tools rely on algorithms or data driven models that are not well understood or clearly explained to employees.
AI in Hiring, Performance and Pay Decisions
The use of AI and automated decision tools in recruiting, resume screening, video interview scoring, performance ratings, promotion and pay equity analytics are rapidly reshaping HR processes with associated emerging risks:
- Emerging allegations that these tools embed historical bias (e.g., race, gender, age, disability), leading to discriminatory outcomes for protected classes.
- Growing regulatory scrutiny of automated employment decision tools, including some jurisdictions requiring bias audits, transparency and candidate notice.
Firms may face reputational and credibility issues if their own employment algorithms are later challenged as discriminatory.
Investor and Creditor Disputes in a Tougher Capital Environment
Tighter capital, higher interest rates and more restructurings may fuel disputes over valuation, disclosure and fairness. For firms involved in fundraising, transactions or restructurings, risks include:
- Claims by private equity and venture funds alleging misrepresentation, unfair dilution in “down rounds” (raising capital at a lower valuation than its previous round), or “squeeze out” tactics (actions taken by the majority to dilute or eliminate ownership stake of minority partners) that disadvantage minority partners or investors.
- Claims by lenders and trade creditors that boards favored insiders or select creditors, or engaged in transactions that worsened a company’s financial condition.
Mental Health, Burnout and Accommodation
High pressure professional services environments may also face:
- More accommodation requests related to depression, anxiety, PTSD and neurodivergence.
- Claims that employees who seek leave or accommodations are later subject to negative performance actions or reductions in force, framed as failure to accommodate or retaliation theories.
- Allegations that “always on” or weekend work expectations may undermine stated commitments to well being and disproportionately impact certain protected groups.
These issues can become particularly acute in teams working with demanding clients, complex technology and tight deadlines – exactly the environments where AI, technology and analytics are deployed to drive efficiency.
Contact
The Professional Services Practice at Aon values your feedback. To discuss any of the topics raised in this insight, please contact Catherine Jones or a member of your Aon client service team.
Catherine Jones
Senior Vice President and Executive Director, Consulting Firm Leader
New York
About Aon
Aon (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses.
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