'Firms lack understanding of security risks' surrounding board materials'

Board communications is becoming increasingly complex yet outdated board procedures, unsecure distribution channels and costly board materials are all contributing to increased security gaps, according to media and information firm Thomson Reuters' annual Board Governance survey.

The survey covered more than 125 general counsel and company secretaries across a wide-ranging cross-section of industries and geographies globally. "It (Board Governance survey) builds on a survey of similar respondents conducted in September 2012 so presents year-on-year trends and developments," Thompson Reuters said in a release.

The latest report revealed that over 67 per cent of the respondents admitted that they did not know if their board members destroyed all print copies of board materials, while 62 per cent of respondents had heard of situations where board members had left sensitive information in public places, representing a 12 per cent increase compared to last year.
 

According to the findings from the report, over three-quarters of organisations utilise unsecure, personal email accounts to distribute board documents and almost half do not ensure board communications are encrypted.

Board books and volume of information continue to grow. On an 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 per cent uplift from the average of 10,000 pages reported the prior year. Board members per organisation is increasing with 43 per cent now having more than 11 board members, rising from 29 per cent in 2012, the report said.

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 per cent of respondents saying their board actively set a risk culture and cascaded its risk policy to management. This is a significant increase from 2012 where only 57% of respondents said the same, it added.

"Corporate governance is becoming increasingly complex due to demanding regulatory requirements and scrutiny on organisations' compliance. 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," the survey said.