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Worry About Cyber Threats, Executive Pay, and More
Behind closed doors, what are corporate board members sayingor not sayingabout cybersecurity, executive compensation, and social media? For this we turn to the results of the 2013 Law in the Boardroom survey of some 550 directors and general counsel, from Corporate Board Member and FTI Consulting. See how your company stacks up:
What GCs and directors worry about
Data Security: Both general counsel and directors ranked data security second on the list of things keeping them up at night. (GCs ranked regulatory compliance first; for directors, the number one worry is succession/leadership transition.)
Only a third of general counsel feel very confident in their companys ability to respond, and less than a quarter of directors agree . . . While more than half of both groups (51 percent of GCs and 63 percent of directors) are at least somewhat confident in their companys ability to handle a breach, is that enough, given the escalating risks in this new electronic era?
What theyre spending a lot of time on
Executive Compensation: General counsel and board members dont rank executive compensation high on their list of worries, but they sure do say it takes up a lot of their time60 percent of directors and 46 percent of GCs rate it one of their top issues in terms of time commitment, according to the survey.
What they feel good about
Codes of Conduct: The majority of directors (66 percent) and general counsel (60 percent) are very confident that their companys code of conduct helps promote compliance by linking employee guidelines to corporate values. Moreover, 80 percent of all respondents said the code of conduct had been reviewed in the past year.
Whats not getting talked about
New Guidance Documents: Remember those 100-plus pages on antibribery enforcement issued by the Department of Justice and the Securities and Exchange Commission last fall? Or how about the SECs 2011 guidance on cybersecurity disclosure? Interestingly, only about 35 percent of GCs and even fewer directors (25 percent) indicated theyve discussed these issues in the boardroom, the report says, even though arguably these areas should be part of any boards regular oversight of enterprise risk management.
[O]nly 16 percent reported they have discussed the topic formally and feel confident their board has a good understanding of the risks, 37 percent said the topic has been broached but they need more information to feel comfortable with the strategy and the risks, and 26 percent said their board has no plans to formally discuss social media issues.
What directors and GCs dont want to talk about (in public)
Internal Investigations: The survey asked whether boards should disclose internal investigations involving one or more members of the executive team. The answer was a big NO from 82 percent of general counsel and 63 percent of directorsthough that does leave more than a third of board members who think disclosure is the way to go.