Cybersecurity, innovation and digitisation rising up corporate agenda, says Deloitte
EMEA board member survey shows more priority on placed on security, innovation and digital transformation
Corporate boards of directors in the EMEA region are growing more aware of threats to cyber security, according to a study by Deloitte.
The EMEA 360 Boardroom Survey, which canvassed 271 non-executive directors across 20 countries in the EMEA region, found growing awareness and higher priority being given to cyber security issues, as well as more focus on innovation and digitisation.
The study found that strategy was the number one concern for non-executive board members, followed by growth, performance, mergers and acquisitions activities and innovation.
"This Deloitte study is unique because it provides an exclusive perspective on the issues boards of directors in the region are currently facing," said Rami Wadie, Enterprise Risk Services partner and Corporate Governance leader at Deloitte in the Middle East. "Whereas board effectiveness in the Middle East has been a key issue in the past 12 months, concerns about global recovery are expected to become more significant, which may be a reflection of the current and perceived future state of the oil industry and forecast oil prices."
Sixty percent of respondents ranked innovation as a very important issue, with product innovation gaining the most attention (63%), followed by business model innovation (49%) and digital innovation (47%). Only 9% of respondents said that their organisation did not have an innovation plan, and a further 6% indicated that an innovation plan was still in the process of development.
Digitisation was ranked in twelfth in boardroom priority, up seven places from last year's ranking. Technologies such as data analytics, Internet of Things and robotics are creating change across many sectors, including the rise of new competitors, so digitisation is a key topic for boards.
Wadie commented: "Digitisation is a hot topic for board members. The worldwide trend is of enormous strategic significance for companies; therefore it is also important that the topic is ranked highly on the boards agendas."
Cyber security has become a far more important issue for non-executive directors, ranking at thirteenth on the agenda, up ten places. When asked to rate board awareness of cyber risks, only 48% gave a high rating, while 20% gave a low one. Despite its importance, less than half of respondents said that their organisation currently has an action plan in place to deal with cyber security of which 5% said they have nominated a board member as the cyber security expert with the remainder either believing that this was a matter for collective board responsibility or that management dealt with it.
Notable differences are found between industries; among the respondents within manufacturing industry, cyber security ranks high on the board agenda for only 38%. In the life sciences sector, although half of respondents indicated a high level of awareness, 33% gave it a low ranking.
"Cyber security is one of the biggest future threats for companies. The boards have to be aware of the dangers that come with further digitisation. But so far many companies still sleep on the possible threats for their business - they have to take action, the sooner the better," said Wadie.
IT and technology overall ranked only nineteenth on boardroom agendas, down from fifteenth last year.