Corporate Board Member/FTI Consulting Survey Identifies Key Legal Risks in 2013 for Companies

  Corporate Board Member/FTI Consulting Survey Identifies Key Legal Risks in
  2013 for Companies

    Annual Survey Finds Leadership Succession, Cyber Risk, and Regulatory
      Compliance Are Leading Concerns for Directors and General Counsel

Business Wire

NEW YORK -- May 8, 2013

Managing and mitigating risk surrounding cyber security, IT strategy,
regulatory compliance, and concerns over leadership succession operations top
the list of worries for U.S. directors and general counsel as revealed in the
13th annual Law and the Boardroom Study by Corporate Board Member ^ ®, an NYSE
Euronext Company, and FTI Consulting, Inc. (NYSE: FCN). The 2013 findings
reflect a continued escalation of concern over data security and IT risk, as
well as the onus on public companies with regard to new regulation stemming
from the Dodd-Frank Act. The survey also suggests that directors and general
counsel worry about the need for strong leadership continuity to manage
companies through many new and growing challenges.

In both this year’s and last year’s studies, one of the leading causes for
concern surrounds the area of data security and IT risk as they continue to
dominate a great deal of board-level discussion. Companies are facing hacking,
intrusions, and corporate espionage from both internal and external sources;
thus, their vulnerabilities are continually changing.

“To help companies manage and mitigate this risk, they need to inventory and
map their IP assets, secure their data, and test their networks and systems
for gaps on a constant basis. Board-level concern is complicated by the fact
that IT infrastructure and underlying technologies are fairly opaque to board
members,” says Michael Pace, senior managing director and co-leader of the FTI
Consulting Global Risk and Investigations Practice.

Only a third of general counsel feel “very confident” in their company’s
ability to respond quickly to a security breach and determine whether
confidential data had been compromised, and less than a quarter of directors
felt the same. “We work with companies to demystify technology in addition to
our core investigative, remediation, and prevention work,” Pace says.

With regard to the areas that directors and general counsel believe will
comprise the majority of their time, executive compensation overwhelmingly
tops the list. This demonstrates companies’ commitment to fully vetting
executive compensation plans, peer analyses, and related shareholder
communication, as they head into the third proxy season with mandated
say-on-pay votes. Interestingly, the vast majority of directors feel confident
in their ability to manage compensation risk in 2013, perhaps indicating that
processes and policies put in place over the last several years following
Dodd-Frank legislation have become more a part of the governance fabric than
when they were first introduced.

“Say on pay introduced a structured process for shareholders to voice their
opinions and subsequently withhold votes against directors and or compensation
committees,” says TK Kerstetter, chairman of Corporate Board Member. “It
should come as no surprise that managements and legal teams are spending extra
time to ensure their organizations and compensation plans are viewed

To help directors increase their effectiveness, the survey asked what type of
information their board needs to be effective in 2013. The five areas
receiving the largest percentages of director responses were succession
planning and IT risk (tied with the most responses) followed by strategic
planning, crisis management, and competitive/marketplace information.

While not ranked among the top five concerns for directors, social media is an
emerging issue that will continue to be a topic for debate in the boardroom.
It is interesting to note that director’s confidence in understanding the
risks around social media has diminished by 24 percent - with only 16 percent
of directors expressing they have a good understanding of the risks associated
with social media compared to the 2012 survey. “With the SEC’s recently
released guidance on social media, they have recognized that social media is a
real and valuable disclosure medium for communications with an important
subset of stakeholders,” according to Elizabeth Saunders, senior managing
director and Americas chairman of the FTI Consulting Strategic Communications
practice. Saunders adds, “It is critical that organizations have a social
media strategy and policies in place in order to manage crisis and—perhaps
more importantly—to capture the opportunities that social media provides.”

For additional findings or to download a PDF version of the complete report on
the Corporate Board Member/FTI Consulting 2013 Law and the Boardroom Study,
please click here
To hear more in-depth analysis and perspective on this year’s study, register
for the Law in the Boardroom: Today's Top Legal and Governance Concerns for
Directors and General Counsel webcast on June 5^th. To register, please click
here (

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 over 3,900 employees located
in 24 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 $1.58 billion in revenues during fiscal year 2012. More information
can be found at

About Corporate Board Member

Corporate Board Member^®, an NYSE Euronext Company, is the leading information
resource for senior officers and directors of publicly traded corporations,
large private companies and Global 1000 firms. The quarterly publication,
Corporate Board Member magazine, provides readers with decision-making tools
to deal with the strategic and corporate governance challenges confronting
their boards. Corporate Board Member further extends its governance leadership
through an online resource center, conferences, roundtables and timely
research. The magazine maintains the most comprehensive, up-to-date database
of directors and officers serving on boards of publicly traded companies
listed with NYSE Euronext and The NASDAQ OMX Group Inc. stock exchanges.

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 Euronext 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. For
more information, visit


FTI Consulting
Mollie Hawkes, 617-747-1791
Corporate Board Member
Stephanie Clark, 615-309-3213
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