EisnerAmper's Fifth Annual Board of Directors Survey highlights cybersecurity breaches and social media use as top risks that concern boards of directors in 2014. With reputation, cybersecurity, and social media largely intertwined, the survey notes that the associated risks have captured the attention of most boards.
The survey’s key findings include the following:
- Cybersecurity climbed to the second most important area of risk management to boards, only behind reputational risk. Yet, boards displayed confidence levels below 60% for both their CEOs and CFOs when asked if such individuals have a strong understanding of cybersecurity.
- Boards also showed little confidence in their management’s knowledge of social media. In fact, many executives admitted that they lacked understanding of new media and cyber issues, which are areas where “mere general knowledge can miss the critical nuances necessary for effective strategic and operational decisions.”
The survey interestingly shows that, as data breaches become more public (affecting reputations and brands) and regulation with respect to reporting breaches gains more focus, cybersecurity and social media risks are not only operational concerns, but also gain attention at the highest levels.