Directors to Watch: Four Rising Board Topics
I was named a Director to Watch in 2016, and in the five years since, corporate governance has been reshaped by the convergence of disruptions led by rapid technology and digital transformation, climate change, evolving customer sentiments, changing workforce needs, supply chain fragility, investor scrutiny and geopolitical, racial and demographic impacts. Boards provide leadership by recognizing the strategic imperative of interdependent challenges and opportunities, and multiple stakeholders on the long-term performance of the companies they steward.
Since 2016, the following topics have risen on the board agenda:
Strategic alignment of purpose, profit, ESG and sustainability. Boards are overseeing strategic planning, risk management and long-term value creation across multiple stakeholders as the role and purpose of the corporation has evolved from a shareholder primacy model. The pandemic, climate change and racial issues have further reinforced ESG as a competitive performance opportunity for bottom-line success while balancing shareholder, employee, customer, supplier, community and climate demands. Values, transparency and trust are now a strategic bedrock. Boards are recommending that ESG goals and metrics be embedded into corporate governance, strategy, culture and operations.
Enterprise risk and resilience. To deal with persistent disruption, boards are guiding their companies for agility, innovation and flexible business models that enable strategic pivoting. Boards recommend that management take an integrated enterprise risk management approach with scenario planning, stress testing and crisis preparedness to develop operational, financial and technology resiliency.
Human capital and culture. The pandemic-driven focus on health and well-being, coupled with technology-led automation and digitization, has spotlighted human capital as a strategic asset. Boards have increased focus on strengthening corporate culture, DEI, attracting and retaining talent, addressing skills gaps and workplace practices to create a workforce of the future.
Cybersecurity and data privacy. With digital transformation, data proliferation, increased remote and distributed work, escalating cyber risks and ransomware attacks, and regulatory requirements, boards are reviewing cyber resilience through policies, procedures and controls. Infrastructure protection, data privacy and safeguarding of the company’s reputation, finances and operations remain at the forefront.