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
|3||Disruption to business after major incident|
Internal risk issues, ranking of survey responses
|1||Disruption to business after major IT disruption|
|3||Loss of data, data corruption, system failure|
|4||Loss of key person|
|5||Succession planning around CEO and board roles|
|6||Failure to keep up with technological advances|
|7||Non-compliance with legal & contractual obligations|
|8||Making incorrect strategic decisions due to lack of data|
|9||Loss of income through inadequate emergency procedures|
Emerging risk issues, ranking of survey responses
|1||Increasing corporate governance requirements|
|6||Oil spike/price rise|