Don Keller
In a recent survey by PricewaterhouseCoopers of directors on corporate boards, risk management was a key area where directors felt they needed more focus. And it was only one of several topics included in an annual PwC survey that touches on how a general counsel does his or her job.
The survey polled 834 corporate directors of U.S. corporations, with 67 percent of respondents from companies with more than $1 billion in annual revenue. Survey topics included executive compensation, proxy disclosures, IT, communications, and more.
"Many of the topics are germane to what general counsel do," explained Don Keller, a partner in PwC's Center for Board Governance. "They often serve as corporate secretary or gatekeeper for the board, often drive the agenda, and often provide counsel to the board."
On risk management, for example, only 19 percent of directors rated their board as very effective at monitoring plans to reduce exposure. "The emphasis on risk management and its importance seems to be rising," said Keller, noting that 57 percent said they would like the board to increase its focus on risk.
As securing company and customer data grows more complex, nearly half the directors surveyed (46 percent) believed their board's ability to oversee strategic use of IT is less than effective. And 38 percent want to spend more time on IT.
The respondents also expressed concern about shareholders' views of executive compensation. Some 72 percent responded that they would reconsider executive compensation, even though fewer than 50 percent of shareholders voted against the compensation levels in recent "say on pay" during the last proxy season.
"This suggests that directors are listening and are sensitive to whether or not there is significant shareholder dissatisfaction," Keller explained.
One interesting result shows that the use of mobile computing devices, such as iPhones and iPads, in the boardroom is becoming more widespread. A large majority of respondents have (42 percent), or wish they had (38 percent), started using tablets or smartphones to receive their board materials.
"If I'm a GC who's facilitating board meetings, that will get my attention," Keller said. "It means I've got to start thinking about the use of emerging technology in the boardroom."
The survey also showed that directors' communications with employees, shareholders, and analysts have increased considerably. "So if board members are going to increase communication with more constituents, the legal department will typically get more involved" to assure that full disclosure requirements are met, Keller said.
A related area relevant to GCs involved the increased transparency and enhanced disclosures that directors want on proxy statements. "It's likely that corporate counsel need to be even more focused on coaching about full disclosure regulations," according to Keller.
The survey polled 834 corporate directors of U.S. corporations, with 67 percent of respondents from companies with more than $1 billion in annual revenue. Survey topics included executive compensation, proxy disclosures, IT, communications, and more.
"Many of the topics are germane to what general counsel do," explained Don Keller, a partner in PwC's Center for Board Governance. "They often serve as corporate secretary or gatekeeper for the board, often drive the agenda, and often provide counsel to the board."
On risk management, for example, only 19 percent of directors rated their board as very effective at monitoring plans to reduce exposure. "The emphasis on risk management and its importance seems to be rising," said Keller, noting that 57 percent said they would like the board to increase its focus on risk.
As securing company and customer data grows more complex, nearly half the directors surveyed (46 percent) believed their board's ability to oversee strategic use of IT is less than effective. And 38 percent want to spend more time on IT.
The respondents also expressed concern about shareholders' views of executive compensation. Some 72 percent responded that they would reconsider executive compensation, even though fewer than 50 percent of shareholders voted against the compensation levels in recent "say on pay" during the last proxy season.
"This suggests that directors are listening and are sensitive to whether or not there is significant shareholder dissatisfaction," Keller explained.
One interesting result shows that the use of mobile computing devices, such as iPhones and iPads, in the boardroom is becoming more widespread. A large majority of respondents have (42 percent), or wish they had (38 percent), started using tablets or smartphones to receive their board materials.
"If I'm a GC who's facilitating board meetings, that will get my attention," Keller said. "It means I've got to start thinking about the use of emerging technology in the boardroom."
The survey also showed that directors' communications with employees, shareholders, and analysts have increased considerably. "So if board members are going to increase communication with more constituents, the legal department will typically get more involved" to assure that full disclosure requirements are met, Keller said.
A related area relevant to GCs involved the increased transparency and enhanced disclosures that directors want on proxy statements. "It's likely that corporate counsel need to be even more focused on coaching about full disclosure regulations," according to Keller.
See also: "What are GCs and Directors Thinking About Corporate Governance?," CorpCounsel, August 2011.
Subscribe to Corporate Counsel
