For a second straight year, boards of directors see reputational risk as their top concern. They’re also displaying a new optimism about a financial recovery, and are making plans to hire staff to support CFOs, according to a survey by EisnerAmper LLP. The study, “Concerns About Risks Confronting Boards,” found that 66% of 193 directors see reputational risk as their top concern, compared with 59% who view regulatory risk as the top concern. While survey respondents’ worries about regulatory risk have remained relatively stable, “the concern about reputation has grown over the last couple of years,” says Kreit. He notes that their reason for concern is “the very high-profile issues that have occurred with companies over the last few years,” including, for instance, the BP oil disaster on the Gulf Coast. Taken together, the top areas of concern in reputational risk are product quality, liability, and customer satisfaction, at 39%. Second is a combination of concerns about integrity, fraud, ethics, and the Foreign Corrupt Practices Act, which totaled 24%.
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