In a straw poll conducted just a few weeks ago, our racial and ethnic diversity Directors to Watch class of 2021 ranked the importance of 10 top issues facing public company boards as the world looks forward to a new year. No consideration was given to types of companies represented — so, for example, a director of a company heavily reliant on shipping or inventory could be expected to place supply chain issues higher on the list than one involved in banking.
The top issue for public company board members participating in the survey relates to ESG concerns, more specifically to the creation of measurable key performance indicators that can stand the test of time and provide a viable framework for comparison years down the road. Diversity, equity, and inclusion (DEI) was the second top priority for boards, and issues related to the increasing threat of ransomware and other cybersecurity breaches took the third spot.
Tightly ranked in the middle, in order, are logistics and supply chain disruptions, lessons learned from the COVID-19 pandemic, tone at the top, and climate change/environmental sustainability.
At the bottom of the roster, our 2022 Directors to Watch ranked executive compensation, expanded direct access/interaction with shareholders and other interested parties, and engagement by the CEO and/or the board in political discourse.
One topic not addressed in the 10 key issues offered for ranking relates to human capital management, retention of key employees and executives, and recruitment of top talent. Director to Watch Adalio Sanchez put it this way: “I think the main issue for boards is dealing with workforce changes and the battle for talent. Many companies are struggling with how to balance the two in a brutal talent demand environment. Then, on top of this, we must remain aligned with executive compensation pressures. It’s a triple constraint.”