Boards ignore social media risk

Companies are increasingly anxious about data security threats with one in three general counsel and one in four directors worried their company is insecure and hackable. Meanwhile 41 per cent of directors and 33 per cent of general counsel said they would be spending significant time on information technology and cyber risks this year. Social media is another area which is causing some angst for companies. While general counsel have a better grasp on the procedures and protocols around social media at their own company, with 73 percent of general counsel acknowledging the existence of a formal corporate social media policy, 27 percent of directors surveyed are unsure if their company even has a social media plan. Forty-five percent of directors indicated that they have discussed social media in the boardroom but need more information to have a good understanding of the strategies and risks, while only 22 percent of directors indicated that they have a good understanding of strategies and risks around social media.

Social media cannot be ignored

Commenting on the study, Jean-Marc Levy, NYSE Euronext, Senior Vice President and Head of Global Issuer Services, said, "It's clear that there is a need for education in the boardroom around social media — from understanding risks and strategies to awareness of the policies that are in place. The bottom line is that social media cannot be ignored -- especially with the U.S. Securities and Exchange Commission recognizing social media channels as an appropriate means to communicate with shareholders -- and it will be integral to the success of every company to ensure that directors, executives and employees are on the same page."

The annual Law in the Boardroom Study, designed by FTI Consulting and NYSE Governance Services, was conducted between February and April of 2014. The survey reflects the responses to weigh in on and identify the latest and most pressing governance trends and legal matters in today's boardroom from nearly 500 directors and general counsel of U.S. publicly traded companies.