Corporate Board Member/FTI Consulting Survey Identifies Key Legal Risks in 2013 for Companies
08 Maggio 2013 - 3:10PM
Business Wire
Managing and mitigating risk surrounding cyber security, IT
strategy, regulatory compliance, and concerns over leadership
succession operations top the list of worries for U.S. directors
and general counsel as revealed in the 13th annual Law and the
Boardroom Study by Corporate Board Member ®, an NYSE Euronext
Company, and FTI Consulting, Inc. (NYSE: FCN). The 2013 findings
reflect a continued escalation of concern over data security and IT
risk, as well as the onus on public companies with regard to new
regulation stemming from the Dodd-Frank Act. The survey also
suggests that directors and general counsel worry about the need
for strong leadership continuity to manage companies through many
new and growing challenges.
In both this year’s and last year’s studies, one of the leading
causes for concern surrounds the area of data security and IT risk
as they continue to dominate a great deal of board-level
discussion. Companies are facing hacking, intrusions, and corporate
espionage from both internal and external sources; thus, their
vulnerabilities are continually changing.
“To help companies manage and mitigate this risk, they need to
inventory and map their IP assets, secure their data, and test
their networks and systems for gaps on a constant basis.
Board-level concern is complicated by the fact that IT
infrastructure and underlying technologies are fairly opaque to
board members,” says Michael Pace, senior managing director and
co-leader of the FTI Consulting Global Risk and Investigations
Practice.
Only a third of general counsel feel “very confident” in their
company’s ability to respond quickly to a security breach and
determine whether confidential data had been compromised, and less
than a quarter of directors felt the same. “We work with companies
to demystify technology in addition to our core investigative,
remediation, and prevention work,” Pace says.
With regard to the areas that directors and general counsel
believe will comprise the majority of their time, executive
compensation overwhelmingly tops the list. This demonstrates
companies’ commitment to fully vetting executive compensation
plans, peer analyses, and related shareholder communication, as
they head into the third proxy season with mandated say-on-pay
votes. Interestingly, the vast majority of directors feel confident
in their ability to manage compensation risk in 2013, perhaps
indicating that processes and policies put in place over the last
several years following Dodd-Frank legislation have become more a
part of the governance fabric than when they were first
introduced.
“Say on pay introduced a structured process for shareholders to
voice their opinions and subsequently withhold votes against
directors and or compensation committees,” says TK Kerstetter,
chairman of Corporate Board Member. “It should come as no surprise
that managements and legal teams are spending extra time to ensure
their organizations and compensation plans are viewed
favorably.”
To help directors increase their effectiveness, the survey asked
what type of information their board needs to be effective in 2013.
The five areas receiving the largest percentages of director
responses were succession planning and IT risk (tied with the most
responses) followed by strategic planning, crisis management, and
competitive/marketplace information.
While not ranked among the top five concerns for directors,
social media is an emerging issue that will continue to be a topic
for debate in the boardroom. It is interesting to note that
director’s confidence in understanding the risks around social
media has diminished by 24 percent - with only 16 percent of
directors expressing they have a good understanding of the risks
associated with social media compared to the 2012 survey. “With the
SEC’s recently released guidance on social media, they have
recognized that social media is a real and valuable disclosure
medium for communications with an important subset of
stakeholders,” according to Elizabeth Saunders, senior managing
director and Americas chairman of the FTI Consulting Strategic
Communications practice. Saunders adds, “It is critical that
organizations have a social media strategy and policies in place in
order to manage crisis and—perhaps more importantly—to capture the
opportunities that social media provides.”
For additional findings or to download a PDF version of the
complete report on the Corporate Board Member/FTI Consulting 2013
Law and the Boardroom Study, please click here
(http://www.fticonsulting.com/global2/critical-thinking/reports/law-in-the-boardroom.aspx).
To hear more in-depth analysis and perspective on this year’s
study, register for the Law in the Boardroom: Today's Top Legal and
Governance Concerns for Directors and General Counsel webcast on
June 5th. To register, please click here
(https://cc.readytalk.com/r/139alsl3t8g6).
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 over 3,900 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 $1.58 billion in revenues
during fiscal year 2012. More information can be found at
www.fticonsulting.com.
About Corporate Board Member
Corporate Board Member®, an NYSE Euronext Company, is the
leading information 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 NYSE
Euronext and The NASDAQ OMX Group Inc. stock exchanges.
www.boardmember.com
About NYSE Governance Services
NYSE Governance Services is an integrated suite of resources for
public and privately held companies worldwide seeking to create a
leadership advantage through corporate governance, risk, ethics and
compliance practices. NYSE Governance Services leverages the
expertise of Corpedia®, a leader in risk assessment and e-learning
for ethics and compliance, and Corporate Board Member®, a trusted
source on governance matters for company directors and C-level
executives - both NYSE Euronext companies. NYSE Governance Services
offers a range of training programs, advisory services,
benchmarking analysis and scorecards, exclusive access to
peer-to-peer events and thought leadership on key governance topics
for company directors and C-level executives. For more information,
visit www.nyse.com/governance
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