Risks related to cyber security and shareholder engagement are among the growing challenges facing corporate board members, a new survey released by NYSE Governance Services along with Spencer Stuart.

Three-quarters of the participants in the What Directors Think 2015 survey were very confident in their ability to monitor operational risk and internal fraud. But only 23% expressed similar confidence in their ability to manage cyber risk and only 19% were very confident they could handle social media risk.

boardroomEighty percent of directors said cyber risk was an agenda item over the past 12 months. “It’s telling that, while it appears directors are discussing cyber risk, a large percentage still aren’t fully confident in their ability to manage it,” the report says.

Only 35% of respondents said their board had discussed social media risk as an agenda item in the past year.

“Boards must be ready to oversee a myriad of risks, especially those related to cyber security — and the social media realm — which is unfamiliar territory for some current directors,” the survey recommends. “As a result, forward-thinking boards looking to refresh their ranks will want to add members who have technological and social media experience to guide the board in an arena where it is all too easy to make innocent but often damaging corporate blunders.”

In another emerging trend, the survey notes that the “current uptick in shareholder activism has increased awareness of the need for transparency and external communication.”

Nearly 60% of participants rated their board’s understanding of its investor base as good, while 29% rated it as excellent. Only 12% said fair and 1% poor.

Of those that saw proposals introduced on their proxy ballots over the past 12 months, 68% said the process went smoothly and amicably, while 23% said that despite some dissension, shareholders, the board, and management were ultimately able to come to an agreeable outcome.

“Today’s public companies need at least one or two board members with experience in private equity and/or with activism. It is important to understand the mindset of activist investors, their (determined) approach, and levers they are likely to engage,” said Valspar board member John Ballbach.

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