Law in the Boardroom in 2014
Cyber risk, M&A, shareholder engagement, and compliance dominate today’s legal oversight environment. Here are the results of our nationwide survey of directors and general counsel on the risks that matter most in 2014.
Given the burgeoning role risk, compliance, and shareholder activism play in today’s boardroom, the relationship between the board and its legal counsel has never been more important. Directors are being held to an increasingly greater degree of responsibility, making the support of their company’s general counsel vital to meeting their fiduciary duties. With that in mind, we designed our annual Law in the Boardroom study to elicit information on the key issues directors and general counsel are facing and to help us identify the latest governance trends. Earlier this year, nearly 500 directors and general counsel responded to our survey request, allowing us to gather data and compare and contrast each group’s perspectives on these important issues.
Beyond the traditional topics of compliance and compensation, which are still key issues for directors, the biggest trends that emerged from the 2014 Law in the Boardroom study involve ongoing concern over newer issues such as IT/cyber risk, shareholder engagement, and social media, along with a continuing surge in time spent on M&A and other competitive factors. In fact, this year M&A outstripped executive compensation as the issue likely to require the greatest time commitment of directors; M&A also ranked ahead of compensation in terms of expected time required of general counsel, trailing only litigation. Meanwhile IT/cyber risk was chosen by 41% of directors and 33% of general counsel as an issue they will spend significant time on, up appreciably from last year.
Other issues of focus include operational efficiency, succession and talent management, ethics and anticorruption, corporate reputation, crisis management, and strategic planning. The latter was noted once again this year as an area directors will spend a good deal of their time on and need better information on to manage more effectively. To report on our results, we’ve broken down the key areas of concern in the following sections. Read on for more information about the interaction between directors and general counsel and how they approach these important topics.