Apart from financial risk, 66 percent of corporate board members identified reputational risk as their primary concern, according to a survey of 190 board directors by accounting firm EisnerAmper.
Regulatory and compliance risk came in a close second at 59 percent, followed by IT risk at 54 percent, and CEO succession planning at 53 percent.
“Reputational risk remains top-of-mind, but what is emerging is a broader view of what reputational risk entails,” said Steven Kreit, a partner in EisnerAmper’s Services to Public Companies practice.
The survey results reveal that directors view reputational risk as comprising operational and human elements. Functional concerns such as product liability, outsourced networks, privacy and data security factor in with employee-related issues such as fraud, customer relations and crisis management.
Regulatory and compliance risk is still very much a concern of boards. When asked to rate their concerns about upcoming regulatory action, nearly 60 percent of the board members surveyed cited mandatory audit firm rotation as important. More than half of the respondents said that financial reform was of high or moderate concern.
Nearly 80 percent of the board members surveyed said their companies were turning to the internal audit department for help in identifying risk.
Growth opportunities are of importance to directors, with 68 percent citing mergers and acquisitions as being an investment option for their firms. Of particular note, 71 percent of the survey respondents said that internal growth and expansion was a timely opportunity, a result 20 percent higher than reported last year.
“Today’s director is being asked to be aware of a seemingly endless variety of concerns and this ‘full plate’ could itself be a risk,” said EisnerAmper CEO Charly Weinstein. “A useful discussion might be had on whether concerns about risk should be centralized in its own committee of the board.”
To access the report, visit www.eisneramper.com/IT-Risk-Management-0512.aspx.
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