Stamford, CT., — Corporate Board Member, a division of Chief Executive Group and a market leader in board education, along with Spencer Stuart, a global, senior executive search firm, have released the results of the 15th annual What Directors Think survey, which reflects the opinions of more than 200 directors at publicly traded U.S. companies. Despite the activist headlines and the economic boom times, the survey finds boards are overwhelmingly concerned with being ill-equipped to keep up with the acceleration of technology and disruption.
Nearly two-thirds (63 percent) of directors surveyed said their board has at least one member with the technical skills to engage in a meaningful discussion with senior information security executives on matters of a highly technical nature. Yet, a similar proportion (67 percent) reported having had to bring in subject matter experts to help master contentious cyber issues, and 20 percent of those who had not yet done so at the time of the survey were considering doing it in the near future.
Julie Hembrock Daum, who leads the North American Board Practice at Spencer Stuart, says when it comes to technology, boards are indeed having to evolve. “With an eye to the disruptive forces facing their businesses, boards are adding directors with fresh perspectives and knowledge in emerging areas of importance, including technology, digital and marketing expertise,” she continues, adding that in its research, Spencer Stuart has found that nearly 20 percent of new S&P 500 directors have backgrounds in the technology or telecommunications industries.
It is clear from the findings that cybersecurity risk remains a top concern for directors, and that it may, in fact, be intensifying. In the 2017 What Directors Think survey, 78 percent of directors said they felt additional regulation would have little effect in curbing cyber attacks and would overburden companies and their boards. This year, 20 percent say that high-profile breaches, especially those that occurred at Equifax, the SEC, and Uber, have convinced them to change their stance in favor of more cyber regulation, enough to have tipped the scale in support of increased regulation in that area.
“The headlines are everywhere,” says Melanie C. Nolen, research editor, Corporate Board Member, who directs the annual survey. “Directors are quickly realizing that they can no longer leave the issue of cybersecurity to the IT department. They need to step in, ask the right questions and demand precise answers. It’s a matter of due care and reasonable prudence for which they can be liable.”
And as regulators work to double down on their efforts to eradicate inadequate cybersecurity practices, directors of publicly traded companies have no choice but to shift their focus to finding a resolution to this growing threat. According to Daum, S&P 500 boards have already begun reshaping their committee structures. “New committees are emerging, and several have become more prevalent in the past 10 years, including risk; science & technology; and environment, health and safety committees. In 2007, for example, 5 percent of boards had a science and technology committee, compared with 10 percent today.”
The 15th annual What Directors Think survey results are detailed in the current issue of Corporate Board Member magazine, available here: https://cloud.3dissue.com/124771/124993/146460/CBM2Q2018/index.html