Risk
The top concerns for directors this year are operational risk, data security, and managing the company’s reputation.
Over 50 percent of GCs, meanwhile, cite major concerns about electronic discovery for litigation/ investigation, managing outside legal fees, and data security, too.
A bit further on down the line, at least a third of GCs consider governance/compliance, operational risk, the Foreign Corrupt Practices Act, and managing company reputation to be major concerns.
Dodd-Frank Act
Not many fans of the 2,300-page financial reform legislation in these parts. Directors and GCs were evenly aligned in their thoughts on Dodd-Frank: 94 percent of directors and counsel alike think the measures need to be re-evaluated, while 94 and 95 percent, respectively, think the law incentivizes employees to bypass internal whistleblower procedures and go straight to the SEC.
Additionally, most directors and GCs “agree that the ultimate impact of Dodd-Frank will be increased oversight, reduced earnings, and a less-attractive capital market environment for prospective public companies.”
Compliance
There’s some ambivalence amongst GCs about the possibility of regulatory actions against their companies. Fifty-six percent of general counsel said they are more fearful of regulatory action than in the previous year’s study, while 42 percent said their level of concern is about the same as before.
With regards to the Foreign Corrupt Practices Act, the landscape looks a little dicey: “Just 36% of responding general counsel serving companies subject to FCPA believe their board and management have done a good job with FCPA training and compliance. Another 63%. . .believe there is room for improvement.”
Finally, 69 percent of general counsel respondents think that regulatory compliance is what will increase their law department’s workload the most over the next year. That’s up from 37 percent of GCs who thought that way in 2009.
via What are GCs and Directors Thinking About Corporate Governance?.
