FTI Consulting and NYSE Governance Services Study Identifies Key Risks and Legal Trends for Companies in 2015
May 21 2015 - 7:30AM
FTI Consulting, Inc. (NYSE:FCN), the global business advisory firm
dedicated to helping organizations protect and enhance their
enterprise value, and NYSE Governance Services (NYSE:ICE), a
leading provider of corporate governance, risk, ethics and
compliance services for public and privately held companies, today
released findings from the 15th Annual Law in the Boardroom Study.
This year's study revealed that Information Technology ("IT") and
cybersecurity ("cyber") risks remain the top concern for directors
and general counsel. Other concerns cited in this year's survey are
increased shareholder engagement, escalating regulatory issues,
merger and acquisitions ("M&A") and social media.
IT and cyber risks pose some of the most dangerous, elusive and
costly threats to companies. This year's study found that 90
percent of directors and 86 percent of general counsel indicated
they are either extremely concerned or concerned about cyber risk.
More than three fourths (77 percent) of both directors and general
counsel believe that the cyber liability risk at their company has
increased over the last two years. Nearly all (98 percent) of
directors and general counsel indicated that they do not have a
high level of confidence that their companies are totally secure
and impervious to hackers nor are they entirely confident that
their company could quickly detect a cyber-breach. However, 64
percent of directors and 77 percent of general counsel are at least
somewhat confident their board knows the right questions to ask
management about their company's cyber strategy, marking increased
confidence from last year's survey.
"Cyber risk poses a potentially devastating effect on a
business' reputation and bottom line," said Thomas G.A. Brown,
Senior Managing Director in the Global Risk and Investigations
Practice of FTI Consulting who specializes in cyber security and
investigations. "Many companies don't realize the extent to which
they are exposed to cyber risk until after they have suffered a
cyber-attack. It is important for companies today to have a well
prepared response plan in place so that they can quickly address
the situation at hand."
Shareholder engagement was also cited as a key concern for
directors and general counsel. Thirty-six percent of directors
stated that they were either extremely concerned or concerned about
shareholder activism and litigation this year, while 43 percent of
general counsel expressed the same levels of concern. Also
reflecting a rise in shareholder activism and the push for
additional disclosure and transparency, 62 percent of directors and
68 percent of general counsel communicated that their company has
formal shareholder engagement protocols in place.
While both directors and general counsel acknowledged that
operational and market risks have increased for their companies,
they stated that M&A due diligence is an area they feel fairly
confident in their team overseeing. A critical area for confidence
given that when asked which key areas will likely require the most
substantive time commitment in 2015, 51 percent of directors and 42
percent of general counsel chose M&A.
"We have noticed that many companies have had to adjust to the
heightened M&A risks," said Michael Pace, Senior Managing
Director and Global Leader of the Global Risk and Investigations
Practice of FTI Consulting. "New levels of regulatory scrutiny
around corruption in particular, involve acquiring companies to
design certain anticorruption and compliance programs as well as to
develop thorough monitoring and auditing capabilities within their
systems."
Over the years, social media has been an emerging issue and
continues to be a topic for debate in the boardroom. While a
minority of directors (30 percent) and general counsel (35 percent)
do not feel that social media poses any risks against their
company, 91 percent of directors stated that their board does not
have a thorough understanding of the risks related to social media
for their company and 79 percent of general counsel stated that
their legal department does not have a thorough understanding of
the risks related to social media for their company.
"From cybersecurity to an increasingly complex regulatory
landscape, the list of risks that keep directors and general
counsel up at night is not getting any shorter," said Stacey
Cunningham, NYSE Governance Services President. "As the only survey
that draws on the experience and insights of both directors and
general counsel, these results not only point to key topics for the
boardroom to discuss but also provide a critical barometer for
boards to measure their companies against."
About the Law in the Boardroom Study
The annual Law in the Boardroom Study, designed by FTI
Consulting and NYSE Governance Services, was conducted between
February and April of 2015. The survey reflects the responses to
weigh in on and identify the latest and most pressing governance
trends and legal matters in today's boardroom from nearly 500
directors and general counsel of U.S. publicly traded
companies.
The full report can be accessed here:
http://www.fticonsulting.com/global2/critical-thinking/reports/law-in-the-boardroom-in-2015.aspx
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm
dedicated to helping organizations protect and enhance enterprise
value in an increasingly complex legal, regulatory and economic
environment. With more than 4,400 employees located in 26
countries, FTI Consulting professionals work closely with clients
to anticipate, illuminate and overcome complex business challenges
in areas such as investigations, litigation, mergers and
acquisitions, regulatory issues, reputation management, strategic
communications and restructuring. The Company generated $1.76
billion in revenues during fiscal year 2014. For more information,
visit www.fticonsulting.com and connect with us on Twitter
(@FTIConsulting), Facebook and LinkedIn.
About NYSE Governance Services
NYSE Governance Services is an integrated suite of resources for
public and privately held companies worldwide seeking to create a
leadership advantage through corporate governance, risk, ethics,
and compliance practices. NYSE Governance Services leverages the
expertise of Corpedia®, a leader in risk assessment and e-learning
for ethics and compliance, and Corporate Board Member®, a trusted
source on governance matters for company directors and C-level
executives-both NYSE companies. NYSE Governance Services offers a
range of training programs, advisory services, benchmarking
analysis and scorecards, exclusive access to peer-to-peer events,
and thought leadership on key governance topics for company
directors and C-level executives.
http://www.nyse.com/governance
Join our NYSE Governance Services group on LinkedIn and follow
@nysegov on Twitter for news, trends and events about corporate
governance, risk, ethics and compliance from NYSE Governance
Services.
CONTACT: Media Contacts:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com
Marissa Arnold, NYSE
+1.212.656.2411
media@theice.com
FTI Consulting (NYSE:FCN)
Historical Stock Chart
From Mar 2024 to Apr 2024
FTI Consulting (NYSE:FCN)
Historical Stock Chart
From Apr 2023 to Apr 2024