Thomson Reuters Report Reveals Security Issues Surrounding Board Governance
The results of the 2011 Thomson Reuters report entitled ‘Better Board Governance: Communications, Security and Technology in a Global Landscape of Change’ reveals that “corporate policies and practices for managing board documents and communications may not be keeping pace with requirements for security and compliance”, providers of company secretary services London Registrars (http://www.london-registrars.co.uk/) can report.
The report aimed to “take a fresh look” at the state of regulatory reform, corporate governance and company compliance, claiming that “there is an expectation for better board oversight and communication, despite escalating complexities presented by cross-border operations, increased regulation and the challenges inherent in managing geographically dispersed, highly mobile board members”. Some highlights of the report, particularly concerning security issues, include:
Board papers
- The average company secretary prepares around 6,000 pages of “sensitive materials” which are presented to the board each year; some prepare over 200 board packs per year.
- Only a quarter of firms surveyed used secure online board portals, choosing instead to distribute hard copies of board communications.
Board communications
- The report found a “broad lack” of security measures in board communications.
- Most boards surveyed sent documents between members via non-commercial email accounts such as Yahoo and Gmail.
- Most boards do not encrypt board communications, mostly printing and carrying hard copies around with them which could easily be lost or stolen.
Document retention and discovery
- There was uncertainty as to whether the board was in line with company compliance with regards to document retention policies.
- Board documents are often kept on board members’ private home PCs, laptops or private mobile smart phones.
- In the event of discovery hold, documentation and communications were often found to be stored across a variety of devices and servers.
Secure communications
- It was rare for a company to provide board members with secure computing or communication devices for board communications.
- Most board documents were accessible on board members’ personal mobile phones.
Security
- Most board documents are left vulnerable to theft or hacking as they are accessible via wifi or unsecured IT networks.
- 10% of companies have had board members’ laptops, mobile phones or sensitive documents lost, stolen or left in public places.
Board scrutiny
- The majority of boards report they are facing only slightly greater scrutiny compared to last year.
- Nearly two thirds of boards are managing global company issues, with a third of boards dealing with cross-border issues.
- One in six boards are attempting to “conduct themselves beyond current local or global governance norms”.
Challenges
- The most common challenge facing boards today, according to the results of the report, was “regulation and regulatory flux”.
- Other challenges which were highlighted included the difficulty of managing global boards, effective controls, time and security.
If your company would like advice on how to ensure your company secretary is helping to meet board security compliance, or if you are looking to outsource this vital role, consult the experts at http://www.london-registrars.co.uk/.
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