High Anxiety: Five Basic Worries For Every Corporate Board

by Michael Volkov

high anxietyLife is full of anxieties.  We all know that.  Some suffer worse anxieties than others.  As I often say, anxiety comes and goes.  Anxiety cannot be measured but is something that everyone experiences on their own terms.

Corporate boards suffer anxiety.  When a group or organization suffers anxiety, the possible damage to an organization can be significant.  In some respects the whole of the anxieties can be more than the sum of the parts.  As a result, corporate boards, like individuals, have to take affirmative steps to manage their anxieties, respond to them and protect themselves from poor decision-making.

When identifying and measuring issues of concern for corporate boards, there are at least five major and basic worries that every board has to address, no matter what their industry or where they are located.  The global economy has now set in motion global anxieties.

I am not talking about issues of concern which are obvious – of course, every board has to focus on the obvious issues like: How will the economy perform? Will Congress address the sequester and bring about meaningful tax reform?  We all know about these issues, read about them every day, and listen to our politicians’ bloviate on them during 24-hour news presentations.

Instead, I want to focus on five issues which every company should examine, which may not be so obvious.  Or as I like to say do not require a profound grasp of the obvious.

Corporate governance means just that – governance.  And corporate boards need to be proactive if they want to carry out their duties and responsibilities.whatmeowrry

1.  The rise of social media and mobile technology.  The story of our economy for the next few years will be written on social media and mobile communications.  Today there are more mobile devices connected to the Internet than the world’s population.  Nearly 300,000 tweets are sent every minute.

Companies have been slow to recognize this reality and the implications of our Twitter nation.  It has been estimated that only five percent of US companies have embraced social media across all of its stakeholders (consumers, managers, employees, board members).

Companies are starting to communicate through social media.  Consumers interact with companies through mobile technologies.  Government regulators are rapidly starting to focus on corporate policies, practices and issues which occur in the social media space.  Companies have to embrace social media and analyze the implications for risks and competitive advantages.

2.  Cybersecurity.  The government and companies recognize that cybersecurity is now an imperative.  Companies need to act to assess the risk of an attack, the cost of an attack, the direct harm to the company, the reputational risk and the need to protect the company from potential economic devastation.

3.  Information Management.  We are all suffering from information overload.  Social media and the internet have made us aware of too much information.   It is estimated that information overload costs US businesses nearly $1 trillion each year in reduced worker productivity.  The new trend, which is rapidly developing, is how to manage information overload so that companies and individuals access the proper amount of information.

Google is developing new and more effective algorithms for search results.  Information filters will become even more important as consumers and citizens are bombarded with information which can cause overload and inefficiency.

Corporate boards suffer from the same phenomena.  Too much information means ineffective governance.  Key issues are lost in thick and useless reports which only waste time and energy.  Corporate boards need to address information efficiency – the new term for corporate governance.

imagesCAVWFUWH4.  Government Enforcement and Regulation.  One of the legacies of the Obama Administration will be its commitment to increased government regulation and enforcement.  It has been a long time since the government has played such an active role in regulating business and enforcing the laws and regulations.  This trend will not end when the Obama Administration leaves in 2016.  The American public is comfortable with the current balance between economic freedom and regulation.  If anything, it can be argued that the public wants even more enforcement.  Companies have to recognize this trend, prepare for it and refrain from delusional desires of deregulation.

5.  Creative Compliance.  One sure way to put a damper on a corporate board meeting is to invite the Chief Compliance Officer to make a compliance presentation to the board.  Traditionally, board members like to focus on the “fun” issues – financial performance, high-level strategy, business expansion plans and market assessments.

When it comes to compliance, board members like to brush those issues to the side.  The challenge for compliance professionals is how to make compliance integral to corporate performance.  Scary enforcement stories are usually just a teaser for more important discussions and strategies.

How does a compliance officer communicate the importance of compliance, the need for compliance to play a greater role in the business operation, and the importance of board commitment, focus and support?  This is the challenge for the profession over the next five years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.