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By Che Odom
June 6 — Corporate boards and general counsel this year have greater confidence in their companies' ability to address the hot-button issues of cyber-risk preparedness, regulatory compliance and shareholder activism.
That's according to an FTI Consulting Inc. and NYSE Governance Services survey , released June 2, about pressing legal matters facing boards.
Responding to the results, National Association of Corporate Directors President Peter Gleason told Bloomberg BNA that the increase in confidence probably derives from the increased familiarity board members have had with these issues in recent years.
Directors, however, are concerned that all the time spent on oversight cuts into time for strategy, which is “what really drives growth in a company,” Gleason said.
The survey, which polled 354 public-company directors and general counsel in February and March, found that cyber risk continues to be the top issue keeping board members and in-house counsel awake at night.
This year, 56 percent of directors and 57 percent of general counsel named cyber risk as the top concern, down from 90 percent of board members and 86 percent of general counsel in 2015.
Moreover, 78 percent of those surveyed said they now have a good understanding of the cyber risks within their company.
Cyber threats have been in the marketplace for years, and organizations such as the NACD produce guidance on the topic, leading directors to be “more aware” of the threat, Gleason said.
Boards receive a “ton of information on compliance,” which may enable them to feel more confident about complying with increasing regulatory demands, Gleason continued.
The survey found that 95 percent of directors and 90 percent of general counsel report being confident or very confident in the effectiveness of their companies' anticorruption, ethics and compliance programs.
That is a significant increase from 2015, when 70 percent and 62 percent, respectively, expressed such confidence.
Meanwhile, although shareholder activism remains a top issue, fewer directors are worried about the matter. According to the survey, 28 percent of directors said they were concerned or very concerned about activism or related litigation risks, an 8 percent decrease from 2015.
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A release about the survey is available at http://ow.ly/NYku300YJzU.
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