Reputational risk keeps most directors awake at night, according to a survey by Marsh NZ.

From a personal perspective, 62% of respondents rate it as a high concern.

“As a director, your next appointment relies heavily on your reputation in the market,” Marsh’s report says. “With New Zealand being a small interconnected country, it is really no surprise that respondents ranked this matter so highly.”

Reputational risk is also the key external concern from an organisational perspective.

“In today’s world… a crisis can strike unexpectedly and cause greater reputational damage in a shorter period of time than ever before, especially through the realms of social media,” the report says.

However, 34% of respondents have no plans in place to manage such a threat.

The top-ranked internal organisational risk is major IT disruption, such as software failure.

Good business interruption insurance reduces the impact of such an event, Marsh says.

In terms of emerging risks, increasing corporate governance requirements are the most pressing concern, followed by cyber risks.

“With continuous changes in legislation such as the recent health and safety reforms and the Financial Markets Conduct Act, it is no wonder corporate governance is high on the radar of directors.

“Not being familiar with these acts and the consequences of breaching them, from both a legal and reputational perspective, can be huge.”

The prominence of cyber threats is “reflective of the growing concerns people have around technology risks”, the report says.

The survey polled 528 members of New Zealand’s Institute of Directors.