Cybersecurity Issues Found to Force Rethinking of Risk Oversight by Corporate Boards
According to the newest What Directors Think survey released by NYSE Governance Services and executive search consulting firm Spencer Stuart, cybersecurity risk management experiences is a primary attribute being looked for as boards appoint new corporate directors. The study also found that 20 percent of directors lack confidence in their board’s understanding of cybersecurity risks. Further, an information technology background is one of the top four attributes sought after when appointing a new corporate director alongside financial and industry expertise and experience as a CEO. And while most boards expressed confidence in their ability to monitor cyber risks, 40 percent said that there was room for improvement in knowledge and understanding of risk oversight.
“Risk oversight has always been a key focus for boards but with developments in technology and the rise of social media, many are reassessing their skillset or partnering with organizations that specialize in risk management,” said NYSE Euronext Head of Global Issuer Services Jean-Marc Levy. “We’re currently working with a range of companies that want to better understand risk and put processes in place for managing it.”
Directors’ views on the importance of occasionally refreshing boards with new members also reflected acknowledgement of a shortage in cyber risk management. Two-thirds of directors reported that adding new skills and perspectives to the board was important (51 percent) or critically important (16 percent).
“Research from our 2013 Spencer Stuart Board Index shows the number of new board appointees fell by 23% in the period between 2008 and 2012. While there was a 16% uptick in the number of new independent directors elected to S&P 500 boards during 2013 proxy year (339 directors), boards continue to wrestle with the question of how to promote ongoing board renewal,” said Spencer Stuart North American Board Practice Leader Julie Hembrock Daum. “There are several tools boards can use to help ensure they are having a regular dialogue about whether the expertise and diversity of perspective around the table reflects the strategic vision for the organization.”