Corporate board members are more concerned about cybersecurity and corporate reputation than about regulatory compliance risks, according to a new survey by the accounting firm EisnerAmper.
The firm’s fifth annual "Concerns about Risk Confronting Corporate Boards" survey asked corporate board members to identify the risks of greatest concern to them aside from financial risk. The primary concern, cited by 72 percent of the board directors surveyed, was reputational risk, similar to the trend in previous years. Cybersecurity and IT risk came in second at 62 percent, a nearly 10 percent increase from last year’s survey. Regulatory compliance risk—the third most highly ranked concern—dropped 6 percentage points to 50 percent this year.
Board members expressed little interest in capitalizing on opportunities related to the JOBS Act. While the 2012 legislation has been portrayed as potentially making a major impact on an organization’s access to funds, financial strategy and structure, and attracting a larger pool of potential investors, less than 10 percent of the board members surveyed indicated they are planning to take advantage of the opportunities associated with the legislation and any pending changes.
Concern about even older legislation, such as the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has also been dropping.
“The study found that with regulatory compliance factors such as Dodd-Frank and PPACA having been rolled out, the level of concern about those regulations has actually dropped,” said Steven Kreit, a partner in EisnerAmper’s Public Companies practice, in a statement. “When we take into account additional feedback from the participants, it paints a picture of boards coming to terms with both Dodd-Frank and health care reform.”
The survey measured the opinions of directors serving on the boards of more than 250 publicly traded, private, not-for-profit, and private equity-owned companies across a variety of industries, sourced from both EisnerAmper and NACD Directorship databases. Fifty-three percent of the survey group identified themselves as serving on audit committees.