Board communications is becoming increasingly complex yet outdated board procedures, unsecure distribution channels and costly board materials are all contributing to increased security gaps, according to Thomson Reuters.
The group’s latest annual ‘Board Governance survey’, covered more than 125 general counsel and company secretaries across a range of industries and geographies globally, suggests that organisations generally have a poor understanding of the security risks surrounding board materials.
The report, building on a September 2012 survey of similar respondents, finds that:
- Over 67% of respondents admit they do not know if their board members destroy all print copies of board materials.
- Sixty-two per cent of respondents had heard of situations where board members have left sensitive information in public places, representing a 12% increase over 2012.
- Over three-quarters of organisations utilise unsecure, personal email accounts to distribute board documents; almost half do not ensure board communications are encrypted.
- Board books and volume of information continue to grow. On average board books are 179 pages in length according to respondents compared to only 116 pages in 2012. This amounts to 16,010 pages of board material each year representing a 67% uplift from the average of 10,000 pages reported the prior year.
- The number of board members per organisation is increasing with 43% now having more than 11 board members, rising from 29% in 2012.
- Almost half of boards still rely on paper-based board books. There was a slight decrease in the number of respondents who distributed their board books electronically, despite an increase of members being located across borders.
- There has been increased focus on risk oversight with 84% of respondents saying their board actively set a risk culture and cascaded its risk policy to management, while in 2012 only 57% of respondents said the same.
“Corporate governance is becoming increasingly complex due to demanding regulatory requirements and scrutiny on organisations’ compliance,” said Chris Perry, managing director, Risk, Thomson Reuters.
“In this time of heightened risk, it to extremely important for companies to protect their organisation from reputational damage. This survey provides insight and transparency into board governance processes to help provide the information needed to have better risk oversight and to tighten security gaps across an organisation.”