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NZ directors identify their key risks

05 February 2016

A high proportion of New Zealand directors say their boards are spending more time discussing risks than they were two years ago, according to the Directors' Risk Survey Report 2015.

The report has been released by insurance broker Marsh in partnership with the Institute of Directors. It was conducted in November 2015 and 526 Institute members completed it. The first such report was completed in 2013.

A high 74.5% of respondents said they were reviewing risk more than they were two years ago, and 58.9% said their board's involvement in insurance/managing risk had increased over the past 12 months.

Asked what the key risk issues they personally had as a director, reputational risk was the biggest concern, with 61.3% of respondents rating the risk as high (62% in 2013).

Being held personally liable for a legislative breach was rated high by 39.2% (42% in 2013), and loss of personal assets if called to account was rated high by 38.1% (42% in 2013).

Cyber risk was identified as a key external risk, and the respondents said increasing corporate governance requirements was the biggest emerging risk over the next 24 months.

External risk issues, ranking of survey responses

RankRisk
1Reputational risk
2Cyber
3Disruption to business after major incident
4Increased competition
5Financial risks 


Internal risk issues, ranking of survey responses

RankRisk
1Disruption to business after major IT disruption
2Other
3Loss of data, data corruption, system failure
4Loss of key person
5Succession planning around CEO and board roles
6Failure to keep up with technological advances
7Non-compliance with legal & contractual obligations
8Making incorrect strategic decisions due to lack of data
9Loss of income through inadequate emergency procedures 


Emerging risk issues, ranking of survey responses

RankRisk
1Increasing corporate governance requirements
2Cyber risks
3Identity fraud/theft
4Business continuity
5Environmental issues
6Oil spike/price rise
7Terrorism
8Climate change

Last updated on the 16th September 2019