Disruption key challenge for company directors

The percentage of directors satisfied with economic and business performance has seen an average 10 per cent decrease from 2014.

Company directors may have to prioritise allocated time for 'disruptions'.

The latest Director Sentiment Survey from the New Zealand Institute of Economic Research (NZIER) reveals technological and business disruptions, and "time spent on risk oversight" as key challenges for company directors.

Institute of Directors' (IoD) chief executive Simon Arcus said disruption itself is not a problem, but said, it is when disruptions occur that can be challenging.

He said: "It is pleasing to see that 60% of boards agree diversity is a key consideration and 62% regularly discuss composition for the future," despite a recent drop in director satisfaction.

The survey shows 73 per cent of directors are spending more time on risk management today in comparison to a year ago, and are less optimistic about economic performance.

NZIER chief executive Laurence Kubiak said directors are increasingly concerned about the growth outlook of China, a key market for many businesses.

"Recent developments show an improvement in economic conditions, and that has likely improved directors' confidence about the economy."

He said technological disruption has gained prominence as a business risk, and is a new entrant to the top ten risks.

"Most businesses use or rely on technology to operate - cyber risk is a reality of our times - so the ability of boards to consider it as part of enterprise risk is critical in ensuring directors are confident about business resilience," said Arcus.

The percentage of directors satisfied with economic and business performance has seen an average 10 per cent decrease from 2014.

More than 800 members of the Institute of Directors were surveyed last month.