Corporate Board Member/FTI Consulting Survey Finds Companies Focusing on Rising Legal Risks
13 Agosto 2012 - 5:33PM
Business Wire
Escalating risk surrounding cyber security and IT strategy,
operations and corporate reputation are top concerns for U.S.
directors and general counsel as revealed in the 12th annual Law
and the Boardroom Study by Corporate Board Member, an NYSE Euronext
company, and FTI Consulting, Inc. (NYSE: FCN). Accordingly, the
findings reflect changes, such as globalization of U.S. businesses
and increased online communications and delivery channels, taking
place in corporate America. The survey also suggests that proposed
rule changes regarding shareholders’ access to the proxy have
contributed to the rise in concern over proxy access, private
ordering and the manner in which companies manage their
communications with shareholders.
With regard to the areas respondents find most challenging, it
comes as no surprise that this year, more than half (55%) of
general counsel rate data security as a major concern and 48% of
directors feel likewise. Interestingly, this level of concern has
nearly doubled in the last four years: In 2008, only 25% of
directors and 23% of general counsel noted data security as a high
area of concern.
“I hate to say this, but I think it is going to take several
well-publicized security breaches before a majority of corporate
boards finally embrace the fact that doing business today without a
prudent crisis plan in place is a formula for disaster,” said TK
Kerstetter, President, Corporate Board Member. “While a number of
companies are taking steps to become more educated on IT risks, the
fact is that not enough are taking the appropriate actions to fully
prepare their organization.”
Concern about operational risk garnered the second-highest
percentage of responses from both directors (40%) and general
counsel (47%), while corporate reputation risk earned the
third-highest prevalence of responses by directors (40%) and the
fourth highest by general counsel (35%). Furthermore, an analysis
of historical Law and the Boardroom data shows this level of
concern has increased compared with 2007 results, when only 18% of
directors and 25% of general counsel indicated concern about loss
of reputation.
“Boards increasingly are concerned about operational risk in the
context of emerging markets, where rising economic prosperity
offers opportunities to expand operations and grow market share yet
also poses heightened governance risk,” said Neal Hochberg, Senior
Managing Director and Global Leader of the FTI Consulting Forensic
and Litigation Consulting practice. “To make informed decisions
about these market opportunities, corporations increasingly are
conducting proactive market risk assessments that identify and
prioritize the risks that first need to be evaluated.”
Looking ahead, directors were asked what type of information
their board most needs to be as effective as possible in 2012. The
five areas receiving the largest percentages of director responses
were strategic planning (88%), executive compensation plans (48%),
board/ management relations (41%), enterprise risk management (36%)
and investor relations (33%).
For additional findings or to download a PDF version of the
complete report on the Corporate Board Member/FTI Consulting 2012
Law and the Boardroom Study, please visit
https://www.boardmember.com/legalrisks/ or
http://www.fticonsulting.com/global2/critical-thinking/reports/legal-risks-on-the-radar.aspx
About Corporate Board Member
Corporate Board Member, an NYSE Euronext company, is the leading
information and education resource for senior officers and
directors of publicly traded corporations, large private companies
and Global 1000 firms. The quarterly publication, Corporate Board
Member magazine, provides readers with decision-making tools to
deal with the strategic and corporate governance challenges
confronting their boards. Corporate Board Member further extends
its governance leadership through an online resource center,
conferences, roundtables and timely research. The magazine
maintains the most comprehensive, up-to-date database of directors
and officers serving on boards of publicly traded companies listed
with the NYSE Euronext and The NASDAQ OMX Group, Inc. stock
exchanges. www.boardmember.com
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm
dedicated to helping organizations protect and enhance enterprise
value in an increasingly complex legal, regulatory and economic
environment. With more than 3,800 employees located in 24
countries, FTI Consulting professionals work closely with clients
to anticipate, illuminate and overcome complex business challenges
in areas such as investigations, litigation, mergers and
acquisitions, regulatory issues, reputation management, strategic
communications and restructuring. The company generated $1.56
billion in revenues during fiscal year 2011. More information can
be found at www.fticonsulting.com.
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