Board Concern Over Cyber Risks Rising; Trails Only Reputational Risks, Survey Finds

Stay current on changes and developments in corporate law with a wide variety of resources and tools.

Aug. 4 — Cybersecurity risks have become a major concern for boardrooms, a recent survey shows.  

According to the fifth annual board survey by accounting consultancy EisnerAmper LLP, cybersecurity/information technology risk has replaced regulatory compliance risk as the second most important concern to boards.

Sixty-two percent of boards identified cybersecurity/IT risk as a major concern, an increase of 10 percent compared to 2013, the survey found. As before, reputational risk—at 72 percent—remains the top concern for boards, according to the survey.

The EisnerAmper survey—released July 22—from January to March polled directors serving on more than 250 companies across a variety of industries. The surveyed companies included those that were publicly traded, private, not-for-profit and private equity-owned.

Cyber Risks

Cybersecurity has become a top regulatory concern in the wake of several high-profile incidents, including one at Target Corp.

In June, Securities and Exchange Commission member Luis Aguilar urged boards to include cybersecurity preparedness as a critical part of their risk oversight responsibilities. The SEC has opened a number of investigations to examine whether hacked companies properly handled and disclosed a growing number of cyberattacks.

In other highlights, the EisnerAmper survey found that interest in the Jumpstart Our Business Startups Act remains lukewarm.

Fewer than 10 percent of boards said they were planning to take advantage of the opportunities arising under the statute, it found. “It may be worth considering: Is the opportunity as significant and/or as far-reaching as the current [media] coverage portrays it to be, or does the remainder of the legislation need to be written prior to the engagement of these organizations?”

The SEC has yet to implement major portions of the JOBS Act, including crowdfunding and a new $50 million threshold under Regulation A.

The survey is available at

Request Corporate on Bloomberg Law