Increased Regulation Will Achieve Little Without Company Buy-In, Says New Report Based on Views of PLC Chiefs

Report from Korn/Ferry International interviewed Chairmen, CEOs and Board Directors from publicly traded companies in the US, UK and Continental Europe

LONDON, February 24, 2011 - Adding regulations to avoid any repeat of the global financial crisis
will be ineffective if it is not accompanied by a wholesale change in
companies' own attitude to risk, according to a new report from Korn/Ferry
International, the global leader in executive search, leadership and talent
management.

The report, Calculated risk?, offers insight from leaders at some of
today's top organizations and provides board-level perspective on how the
approach to risk has changed in the wake of the global financial crisis.

The last two years have seen several high-profile examples of excessive
risk-taking in the corporate world. As a result, the report indicates that
some politicians, regulators and pundits have reacted by calling for more
stringent risk regulation, in the corporate environment, while many business
leaders perceive this increased oversight to be largely ineffective.

Launched today, the report is based on interviews with chairmen, CEOs and
board directors of leading companies including Kingfisher, Legal & General,
Balfour Beatty and National Grid in the UK, Deutsche Bank, UBS, Nestle and
Lagardere Group in mainland Europe and CB&I, US Steel and Owens Corning in
the United States.

Calculated risk? highlights that risking capital or assets in search of
financial reward is the definition of business. The report poses a question
that is pertinent for global business today: Has our risk appetite become too
conservative; has the pendulum swung too far?

Paul Turner, chairman of the industrial team for EMEA at Korn/Ferry
International commented: "By talking to the leadership teams at some of the
world's largest and most successful companies we have gained valuable insight
into best practice into boards' management of risk. It is clear that the last
few years have led to a seismic shift in boards' oversight of risk and that
looking forward risk will be top of the agenda in all board rooms.

The study reveals that large global businesses see their own attitude to
risk as more important than regulation, and are dramatically changing it due
to the increasing complexity of risk, heightened public interest in corporate
behaviour and the ability of contentious issues to go viral on the Internet,
as well as the threat of new regulation. Today risk is "constantly and
persistently on the minds and in the conversations of the board", in the
words of Peter Brabeck-Letmanthe, Chairman of Nestle.

The report highlights a number of issues that have been prevalent in
large global businesses in the recent past and examines what board best
practice looks like. The key areas of focus and findings are as follows:

The appropriate level of oversight: A board's risk purview needs to suit
their company's scale, strategy and regulatory situation. Will the board
simply review and ratify management decisions, or engage at a more ambitious
level as challengers and counselors on risk issues. Boards must pinpoint
where they want to reside on that spectrum.

Risk requires the full board's attention: Some businesses with complex
risk profiles (e.g. financial services) need to work on risk at the committee
level for efficiency's sake, but ultimately the whole board must be engaged.

Check the organisational risk culture: Boards need to consider ways to
measure, and possibly influence, attitudes towards risk to keep behaviour in
line with the board's risk appetite.

The chairman must challenge the status quo: Risk oversight is hampered by
stifled opinions, so an open, trusting environment is mandatory. The
conversations taking place at board level about risk should be some of the
most challenging.

Renewing the board is critical: New directors should be recruited with
risk in mind, so that the board, on balance, has industry experience, strong
risk instincts, strategic minds, and overarching diversity. Non-executive
directors have a critical role to play here. Having experience in a broad
range of fields is essential. The report recommends an ongoing and systematic
programme of board renewal to bring new thinking that will keep pace with the
changing face of risk.

Risk reports need reassessment: Board members are seeking more granular
information, and more leading indicators, as well as opportunities for
far-ranging discussions with relevant executives.

About The Korn/Ferry Institute

The Korn/Ferry Institute generates forward-thinking research and
viewpoints that illuminate how talent advances business strategy. Since its
founding in 2008, the institute has published scores of articles, studies and
books that explore global best practices in organisational leadership and
human capital development.

About Korn/Ferry International

Korn/Ferry International, with a presence throughout the Americas, Asia
Pacific, Europe, the Middle East and Africa, is a premier global provider of
talent management solutions. Based in Los Angeles, the firm delivers an array
of solutions that help clients to attract, deploy, develop and reward their
talent. Visit www.kornferry.com for more information on the Korn/Ferry
International family of companies, and www.kornferryinstitute.com for thought
leadership, intellectual property and research.

Amy Thomas of Korn/Ferry International, +44(0)20-7024-9240, amy.thomas at kornferry.com; or Simon Rigby, +44-020-7282-2847, or Deborah Saw, +44-020-7282-2959, or Kevin Smith, +44-020-7282-1054, or Ian Morris, +44-020-7282-1037, all of Citigate Dewe Rogerson, firstname.lastname at citigatedr.co.uk