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Quarter of FTSE350 companies not dealing with rising cyber security risks, says report

A survey of company secretaries from the UK's 350 largest listed companies shows that companies are worried about cyber security risks but a quarter of them are not tacking action on the issue. 13 Jul 2015

According to the latest FT/ICSA Boardroom Bellwether survey, three quarters of companies consider the risk from cyber security to be increasing, and two thirds are taking steps to actively mitigate that risk, the report said. A quarter of respondents, however, are not taking any steps to reduce the risks they face.

Lady Barbara Judge, chairman of the Institute of Directors, told the Financial Times that boards must not ignore the risk.

“Although it is creeping into the remit of some risk committees, I think the whole issue [of cyber security] is so overwhelming to boards that often they put it in the 'too difficult' category,” she said.

The report also found that companies are increasingly optimistic about the UK's growth prospects, with 74% anticipating an improvement in conditions over the next 12 months, up from 45% in December, and with only 3% predicting a decline.

Globally, 57% predict improved conditions, up from 33% in December, the report said, "but still well below the 81% this time last year and 59% in December 2013".

Capital expenditure is expected to increase, too: 53% of respondents predicted an increase, up from 29% in December and 51% this time last year. Those expecting it to remain unchanged dropped from 45% in December to 36%, the report said.

The survey found concerns about the impact of a possible 'Brexit' from the UK, but a lack of willingness to speak up about the potential risks.

63% of respondents said that the UK leaving the UK would be damaging to their business. The "effect of the uncertainty about the UK's position comes through very strongly, reflected in calls for 'a clear, fact-based debate on the EU question' and similar comments asking for 'transparent communication for the electorate'," the report said.

Only 3% of respondents believe an exit would be positive, the report said.

However, "only 7% indicate that their company would be willing to speak out for the UK to remain part of the EU", it said.

On diversity in the boardroom, the report said that "despite three years of progress, gender diversity seems to be losing momentum – with 31% of respondents now reporting that they will not meet Lord Davies target of 25% women on boards by the end of 2015". The percentage expecting to reach the target has fallen from 53% last year to 42%, with 20% saying they will "very nearly" meet the target, with 20-24% women.

Only 23% of respondents consider their board to be ethnically diverse, the report said.

Most companies now have Twitter accounts and Facebook pages, the report found, but 33% of respondents said that their board has never discussed a social media policy.

"Given the reputational risks that can be associated with social media it is a surprise this is not higher on the boardroom agenda," the report said.