Annual Survey Finds Increased Confidence for Cyber Risk Preparedness, Shareholder Activism and Regulatory
Compliance
Disruptive Innovations, Third-Party Risk and Enterprise Risk Management Emerge as Key Issues
WASHINGTON, June 02, 2016 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN), the global business advisory firm dedicated to
helping organizations protect and enhance their enterprise value, and NYSE Governance Services (NYSE:ICE), a leading provider of
corporate governance, risk, ethics and compliance services for public and privately held companies, today released findings from
the 11th Annual Law in the Boardroom Study. The collective results point to
increased confidence in several areas of key issues in corporate America today, including cybersecurity ("cyber") risk
preparedness, shareholder activism and regulatory compliance. Three emerging issues found in the survey include disruptive
innovations, third-party risk and enterprise risk management.
This year’s study revealed that while cyber risk topped the list of issues keeping directors and general counsel up at night for
the second consecutive year, a growing emphasis on cyber risk preparedness may have helped ease their levels of concern, which
dropped 34 and 29 percentage points, respectively, over the past 12 months, from 90 percent and 86 percent in 2015. Furthermore, 78
percent of those surveyed believe they now have a good understanding of the cyber risks within their company. Their new confidence
is evidenced by the fact that 77 percent of directors said the reports they receive from management allow them to provide effective
counsel, 74 percent have been trained on cyber awareness, and 53 percent believe their company is well prepared in the event a
cyber breach were to occur.
“It is encouraging to see that corporate leaders have taken the risk posed by cybersecurity breaches to heart,” said Mitch Silber, Senior Managing Director in the Forensic & Litigation Consulting segment at FTI
Consulting. “Compared with last year’s results, the increase in confidence expressed by directors and general counsel, as well as
the increase in training reported, shows that companies are getting both smarter and serious about the risks posed by cybersecurity
threats to their business.”
While innovation can be a tremendous opportunity for growth, it can also be an immense threat to organizations in an era where
emerging technologies can make or break a market share advantage practically overnight. This year, the evasive threat of disruptive
innovation has emerged as a key concern. Although 62 percent of all respondents stated that they hold regular, productive
discussions on enterprise risk management and three-quarters believe they spend enough time discussing risk oversight matters
related to the overall strategy of the company, nearly half (47 percent) of respondents reported being concerned or highly
concerned with disruptive innovations that can gradually threaten their industry and market share.
Shareholder engagement, although a top concern, was another area in which directors showed increased confidence compared to
previous years, with only 28 percent saying they are concerned or very concerned about activism or litigation risk, a decrease of
eight percent from the previous year. Their increased confidence may be related to a finding that shows the vast majority (84
percent) believe they have assessed the vulnerabilities that might make their company a target for activists, up from 69 percent
last year. This year, 63 percent of directors stated that their boards have taken steps to improve their ability to communicate
with shareholders by undergoing specific training. Shareholder engagement concerns have remained steady for general counsel (43
percent were concerned in 2015 compared to 41 percent in 2016), however, the number of respondents who said they have assessed the
vulnerabilities that might make their company a target for activists increased from 76 percent to 89 percent year-over-year.
“The higher levels of confidence among those surveyed speak volumes about the importance of building and measuring a strong
culture of compliance,” said Adam Sodowick, President of NYSE Governance Services. “By regularly assessing potential
vulnerabilities or identifying new cybersecurity issues that were previously unknown, today’s companies can help protect their
brands and their employees by seeking comprehensive compliance solutions.”
Increased confidence was also seen in the area of anticorruption and ethics compliance programs, with overwhelming majorities of
directors and general counsel (95 and 90 percent, respectively) stating they were either confident or very confident in their
internal compliance programs in this area. This year, general counsels appear to be more concerned with third-party risk than
directors (32 percent compared with 17 percent). While general counsel showed the same level of concern last year, double (34
percent) the number of directors reported being “somewhat” or “not at all” confident in their handling of third-party risk in 2015.
Enterprise risk management is also still top-of-mind this year, and a particular concern for directors, due to the multiple
liabilities that can emerge from third-party relationships in today’s global environment.
Neal Hochberg, Global Leader of the Forensic & Litigation Consulting segment at FTI Consulting,
said, “Ethics and compliance are not just internal issues, and while companies are showing tremendous confidence in their internal
compliance programs, there is growing concern about their ability to manage the kind of third-party compliance issues that
potentially represent as great of a risk as those that arise internally. Companies should be careful to consider all potential
compliance risks, not just those that come from within.”
About the Law in the Boardroom Study
The annual Law in the Boardroom Study, designed by FTI Consulting and NYSE Governance Services, was conducted between February and
March of 2016. 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 354 directors and general counsel of publicly-traded US companies.
The full report can be accessed here.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in
an increasingly complex legal, regulatory and economic environment. With more than 4,600 employees located in 28 countries, FTI
Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such
as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and
restructuring. The Company generated $1.78 billion in revenues during fiscal year 2015. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
About NYSE Governance Services
NYSE Governance Services is the leading governance, compliance, and education solutions provider for companies and their boards
of directors. Through a complete set of technology-enabled and data-driven solutions designed to address compliance,
accountability, and risk management, NYSE Governance Services helps companies comprehensively build a culture of integrity from
employee to board level. NYSE Governance Services is a subsidiary of the New York Stock Exchange Group, an Intercontinental
Exchange company (NYSE:ICE). For more information, connect with us at nyse.com/governance, @nysegov or LinkedIn.
About NYSE Group
NYSE Group is a subsidiary of Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses,
and a provider of data and listings services. NYSE Group includes exchanges, market data and connectivity services. The equity
exchanges—the New York Stock Exchange, NYSE MKT, and NYSE Arca—trade more U.S. equity volume than any other exchange group. NYSE is
the premier global venue for capital raising, leading worldwide in IPOs, including technology IPOs. NYSE Arca Options and NYSE Amex
Options are leading equity options exchanges.
About Intercontinental Exchange
Intercontinental Exchange (NYSE:ICE) operates the leading network of global futures and equity exchanges and provides world
class clearing, data, and listing services across many markets. The New York Stock Exchange is the world leader in capital raising
and equities trading.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock
Exchange, Interactive Data, and Trayport. Information regarding additional trademarks and intellectual property rights of
Intercontinental Exchange Inc. and/or its affiliates is located at www.intercontinentalexchange.com/terms-of-use
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a
discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the
forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk
factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 4,
2016.
FTI Consulting, Inc. 1101 K Street NW Washington, DC 20005 +1.202.312.9100 Media Contacts: Nicole Madison +1.212.850.5647 nicole.madison@fticonsulting.com Brendan McManus, NYSE +1.212.656.2135 brendan.mcmanus@nyse.com media@theice.com Investor Contact: Mollie Hawkes +1.617.747.1791 mollie.hawkes@fticonsulting.com
