Annual Corporate Governance & Executive Compensation Survey

2019 Corporate Governance & Executive Compensation Survey

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Shearman & Sterling LLP 30 | Cybersecurity – Preparing for the Changing Landscape WHAT SHOULD BOARDS BE THINKING ABOUT NOW? CYBERSECURITY – PREPARING FOR THE CHANGING LANDSCAPE Lona Nallengara and Emma Maconick Topics like corporate culture, board diversity and sustainability continue to dominate the discussions among directors and those that advise them. These issues are also drawing the attention of institutional investors and, more recently, employees and customers are adding themselves to the debate. While these issues are taking up even more space on the shareholder engagement calendar of public companies and the "ordinary" governance issues, such as CEO/board chair separation or majority voting, are receiving less attention than in the past, risk management continues to be an important priority on the board agenda. For most companies, cybersecurity and data protection are chief among these risk management issues. The changes to the cybersecurity and data protection landscape have been significant. The growing number and sophistication of cyberattacks, INSIGHTS Cybersecurity and data protection are not new areas of focus for directors. Most general counsels and corporate secretaries are working with their board chairs to make more time on the crowded board agenda to discuss these issues. Whether the goal is to better understand the company's risk profile, assess management's handling of cybersecurity threats or learn about emerging trends and best practices, directors are becoming educated on these issues, and the recent developments discussed below should be part of those discussions. the involvement of state actors and cyber-activists and the growing acceptance of the fact that no industry or company is immune compels directors to ensure preparedness and responsiveness do not fall off the board agenda or end up relegated to quarterly briefings by the chief information security officer or the head of information technology.

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