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The Promise and Peril of the Institutional InvestorIssue: 2021 Third QuarterThe rise in prominence and influence of the institutional investor over the last 30 years has been the source of great good for the American corporate scene. The modern corporate governance movement was initiated and propelled to spectacular success by the efforts of the institutional investor class...
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My Global VillageIssue: 2021 Third QuarterSince 1989 my wife, Caro, and I have gone to the South of France for part of the summer. Because of COVID restrictions, last year was an exception. This August we returned to our gated community of 60 houses in the foothills overlooking Cannes. Designed as an ancient village complete with a medieval...
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Help Wanted: The need for employees is the next corporate crisis.Issue: 2021 Third QuarterThe biggest current issue in the boardroom is human capital, and not just because the SEC mandated human capital disclosures for the first time in the last proxy filings. Many companies are having trouble filling jobs left open by the pandemic.I discussed this recently with Charles Elson, our execut...
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Reimagining the BoardIssue: 2021 Third QuarterVenture capitalist Scott Lenet once described the changing nature of competitive risk as “less the shark that might come and eat your lunch and more death by a thousand tiny piranhas.” In other words, any one competitor may not be cause for concern, but the cumulative effect of many competitors, if ...
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The Duties They Are A’ ChangingIssue: 2021 Third QuarterThe last few years have brought boards of directors to the threshold of dramatic change for the first time in decades, and boards need to consider how they will respond to the new environment. The rules governing corporate boards did not change much for most of the last 35 years, but potentially sig...
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The Human Capital Management Mandate for BoardsIssue: 2021 Third QuarterFor years, companies have been moving to treat employees as an asset, not an expense. The pandemic and social protests have only intensified this trend, so that human capital management (HCM) is now a front-and-center issue. With long-term success increasingly depending on attracting, retaining and ...
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The Duty of Oversight in the Face of COVID MandatesIn the United States, vaccination of the population is not only a medical issue, but also a political and workplace issue. This has challenged boards seeking to navigate a host of competing issues, including workplace and customer safety, significant resistance to vaccination against COVID-19 — part...
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Bringing ESG Metrics and Reporting Into Alignment: A partnership between SASB and the IIRC may help boards establish ESG reporting standardsIssue: 2021 Third QuarterAs institutional investors, employees and other stakeholders focus on ESG, board members and management want consistent standards for measuring corporate efforts and advancement.The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) have worked...
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The HCM Funnel: Board Considerations for Disclosures on Human Capital ManagementInvestor demands, societal pressures and competition for employees are pushing boards to be intentional about where and how they focus on human capital management (HCM). Leading companies view HCM as a value driver and strategic differentiator.Boards should view HCM topics the same way they view oth...
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SEC Approves Nasdaq Diversity ProposalThe U.S. Securities and Exchange Commission on Friday approved Nasdaq's proposal to hold companies listed on the exchange accountable for board diversity.The new rule, proposed in December, is the first of its kind. It requires boards of U.S.-based Nasdaq-listed companies to have at least one female...
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Who's Responsible for U.S. R&D Investment?Issue: 2021 Annual ReportThe Cold War era represented the golden age for U.S. research and development (R&D) spending. First there was the massive effort to create atomic weaponry in World War II and the subsequent arms race. Then, spurred by the surprise and fear created when the Russians launched Sputnik, the first sa...
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Investment in the Future: How should the board prioritize R&D spending?Issue: 2021 Annual ReportResearch and development (R&D) spending has been at the heart of many of the United States’ technological advancements, but over the last 20 years China has made a greater investment in technology.According to a National Academy of Sciences report, federal R&D funding as a percentage of gros...
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Board Oversight of R&DIssue: 2021 Annual ReportWhether you call it research and development (R&D), intellectual property (IP) or development and operations (DevOps), creating new products and processes represent both big risks and potentially big rewards. The board needs to know what’s happening and when.Gail Lione, a board member at Badger ...
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Directors to Watch 2021: Gender Diversity in the BoardroomIssue: 2021 Annual ReportAssimilating new lessons from the past 18 months, coupled with actions associated with the evolving racial justice movement, will keep boards busy for the foreseeable future.During this time of transition, at least three of the top board agenda items of early 2020 are roaring back onto the table — d...
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How has board service changed in the wake of COVID-19, and what will board service look like in the years ahead?Issue: 2021 Annual ReportThe pandemic has driven digital transformation and the future workforce to the top of board agendas as directors continue to focus on corporate strategy, risk management and talent oversight.To become even more competitive and relevant, companies must leverage digital technology and best practices s...
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DEI as Fiduciary DutyIssue: 2021 Annual ReportIn 15 years as a board director, I’ve never seen a year more challenging than the one we’ve just shared. We’ve navigated intense disruption, economic downturn, social upheaval and deep personal loss. We’ve been connected by tragedies and deeply vital movements for racial justice. And we’ve brought o...
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A Modern Approach to Recruiting Diverse Board CandidatesIssue: 2021 Annual ReportThe emphasis on diversity, equity and inclusion (DEI) in the boardroom is shaping up to be a permanent reframing of all that boards do and, more broadly, how companies approach corporate governance writ large. Though this emphasis has been steadily increasing over the past several years, the events ...
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Going for 'Woke'Issue: 2021 Annual ReportCEOs are frequently being asked to make a statement and to take a position regarding a myriad of political and social issues. As they increasingly embrace the needs and concerns of a multitude of stakeholders, they are asserting that their companies can “do well by doing good.” Some recent studies s...
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Taming the Tiger in Your TankIssue: 2021 Annual ReportThe recent shareholder revolt at ExxonMobil has captured popular attention and interest in a significant way. It was a shock to the entire corporate community when three insurgent directors, nominated by a small activist fund over strenuous management objection, were elected to the board of such an ...
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Let Your Mission Guide Your Executive Pay: Highlighting a corporate mission could promote longer-term focus.Issue: 2021 Annual ReportMany business thinkers have criticized corporate “short-termism” that discourages crucial long-term investments in intangible capabilities. Executive pay programs get much of the blame, as even “long-term incentives” last only three years, with the goals for each year’s tranche reset annually.Those ...