Corporate Boards Concerned About Industry Disruption, Cybersecurity

By:
Chris Gaetano
Published Date:
Nov 30, 2017
ChangesAheadSquare

A survey of 587 corporate directors at 520 public companies has found that board members are concerned about the changing state of both their own industry and the economy as a whole, as well as emerging cybersecurity threats, according to the National Association of Corporate Directors

More than half of those surveyed, 58 percent, said that they anticipate significant economic changes such as technological disruption, industry consolidation and shifting regulations as the trends having the most effects on their companies over the coming year. Other answers held similar implications of major change to the ordinary course of business: 46 percent said they would be most affected by business model disruption, 46 percent said it would be changing global economic conditions, 38 percent said cybersecurity threads, and 36 percent said competition for increasingly scarce talent. 

“A close look at this survey reveals that today’s directors are facing unprecedented challenges, demands, and expectations that amount to a new mandate for boards,” said Peter Gleason, president and CEO of NACD.

On the matter of cybersecurity specifically, it seems board members are taking the threat more seriously, but as they do so they are less confident of their ability to stop cyberattacks. Only 37 percent of respondents felt confident or very confident that their company is properly secured against a cyberattack, versus 42 percent last year. 

Boards also continue to be under great pressure to produce short-term gains, even at the expense of longer-term strategies. Consistent with last year's findings, 74 percent said that management's focus on long-term goals has been compromised by pressure regarding short-term gains, an effect exacerbated by moves from activist investors. 

The survey also found that boards struggle to understand the culture of their own firms. While 87 percent of directors said they have a good understanding of their company's tone at the top, only 35 percent said they felt similarly confident about how the middle feels and only 18 percent said they have a good grasp of the culture's health at the lower levels of the organization. 

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