NACD’s 'Directorship' magazine articles

Board Governance Structures and ESG

Winter 2023

Companies are facing increasing pressure to manage a growing range of risks as a result of rapidly evolving environmental, social, and governance (ESG) issues. Climate-related factors have gained a great deal of attention among ESG matters, but the scope of ESG is much broader, including social aspects of a company’s relationships with its stakeholders and a growing demand for effective governance and transparency. How might boards adapt their governance structures to provide effective oversight in such a rapidly changing environmental and social landscape? What kinds of changes might boards make in the coming year?

Third-Party Risk Oversight

Winter 2023

As boards become more engaged with understanding their dependencies on vendors and other third parties, what measures can they take to oversee third-party risk with greater confidence and efficacy? Several possibilities are on the horizon—both actions companies are likely to take with increasing frequency and actions boards can task management with considering (if they are not already on management’s radar).

In Board Interviews, Prepare and Steer Focus to Leadership Capabilities

Fall 2022

Board candidates understand the importance of preparing for interviews. As corporate boards strive to expand boardroom diversity with a greater variety of experiences and attributes, candidates may need to spend additional time understanding the company, considering how they can add value, and evaluating whether the opportunity is a good fit.

Could Unconscious Bias Impact Board Searches?

Fall 2022

When boards proactively commit to mitigating the potential for bias in the recruitment process, they may be more likely to build boards that are equipped with the broad range of skills and characteristics that are critical for leading companies in today’s environment.

The Board’s Role in Shaping Climate Strategy

Fall 2022

Climate change initiatives require broad cooperation and collaboration across the public, private, and financial sectors. Corporate boards can play a crucial role in facilitating this collaboration, beginning by taking steps to share knowledge and elevate their climate literacy in order to strengthen directors’ ability to engage on climate imperatives.

Promote Trust in AI to Enhance Long-Term Value

Summer 2022

AI can help deliver exponential benefits to companies that can effectively leverage its power. However, as with other emerging technologies, there is a great deal for boards and senior leaders to understand about the nuanced risks and other potential implications of AI. Directors should challenge their management teams to explain how they are mitigating risk as they integrate AI into products and operations.

The Next Normal in Technology: A Cause for Optimism

Spring 2022

Deloitte’s Tech Trends 2022 relates stories of pioneering enterprises that are automating, abstracting, and outsourcing business processes to increasingly powerful tools. Boards can consider how their companies are affected by trends identified in the report, with a focus on how they may influence oversight of strategy, performance, talent, and risk.

The role of the board in overseeing ESG

December 2021

In corporate boardrooms, few topics seem to be generating more conversation than environmental, social, and governance (ESG) matters. The Center for Audit Quality (CAQ) observed that 95 percent of companies published some type of ESG disclosure in 2020. According to Board Practices Quarterly, diversity, equity, and inclusion; human capital management; and environmental and sustainability matters ranked among the top four board priorities this year.

How purpose is changing the board M&A oversight role

December 2021

While the past two years have been defined and dominated by the global spread of COVID-19, the world has also witnessed a renewed reckoning with racial, economic, and environmental issues. Progress in the economy and success in business has taken place against a backdrop of protests in the streets, splintered politics, and an ever-more-worrying climate outlook.

Analyzing the skills gap in the boardroom

November/December 2021

The increased attention to systemic racism over the last year has coincided with accelerated efforts to bring more women and minorities into the boardroom. Some studies have repeatedly shown that increased diversity in the boardroom leads to smarter decision-making, contributes to an organization’s bottom line, and powers innovation, effective risk management, and more innovative corporate culture. Today, there is no denying that diversity of skill-set and experience can help a board develop a holistic view of its organization’s priorities, values, opportunities, and challenges.

Advancing equity in and beyond the workplace

November/ December 2021

Business leaders have come to understand the importance of cultivating inclusion while simultaneously increasing diversity. But too often we downplay the most important part of the equation: equity. When we focus only on the “D” and “I” in DE&I (diversity, equity, and inclusion), we sometimes mistake steps in the right direction for measurable change.

How can we expand our health equity footprint

November/ December 2021

In virtually every industry, environmental, social, and governance risks are demanding attention from board members. The threat of climate change, for example, has prompted many industries to develop environmental strategies to reduce their carbon footprints. Along these lines, a growing number of organizations, and their boards, are beginning to discuss ways to define and expand their health equity footprints. But what exactly does “health equity” mean, and why is it vital for companies to assess their own impact?

Technology without ethics is a wild beast

July/August 2021

When people hear the word “technology,” they might think of many things—their smartphones, the social media platforms they frequent, or their ability to work remotely, to name a few. What they might not think of are the ethical implications of technology. The same may be true for many corporations and their boards. Indeed, in a survey of directors conducted during a recent Deloitte event, more than 40 percent of the respondents reported that the boards on which they serve had never specifically discussed these implications.

Avoid the Either/Or With Purpose-Driven Strategy

May/June 2021

The Business Roundtable’s 2019 Statement on the Purpose of a Corporation was redefined to focus on all stakeholders: customers, employees, suppliers, the community, and shareholders. Since 2019, questions about stakeholder versus shareholder value have arisen, but evidence suggests that there need not be a choice between the two; the core strategy can integrate purpose to drive and sustain long-term value, serving shareholders and stakeholders alike.

Amplify DE&I strategy through supplier partnerships

March/April 2021

Understanding the impact of diversity, equity, and inclusion (DE&I) on talent is a growing priority in American boardrooms. As boards oversee DE&I strategies, consideration should be given to monitoring how DE&I is amplified in the broader ecosystem of external stakeholders, such as suppliers. This involves understanding how the organization engages with not only diverse suppliers, including enterprises that are at least 51 percent owned and operated by small businesses, minorities, women, and other groups such as LGBTQ+, veterans, and people with disabilities, but also all suppliers on their DE&I agendas.

The top emerging technology trends for 2021

January/February 2021

Most organizations have faced the need for large-scale transformation in the wake of uncertain economic and social conditions. While some companies have struggled to adapt, others have effectively altered their DNA to work in smarter ways and drive innovation. According to a recent Fortune/Deloitte CEO survey, the current environment has fast-tracked digital initiatives that were set to begin or already underway, with 85 percent of CEOs agreeing that the pandemic has significantly accelerated digital transformation—up from 77 percent in June 2020. If technology today is a source of competitive advantage for some organizations and a threat to ongoing survival for others, boards need to better understand the macro technological forces that form the backbone of innovation and transformation, and take a more active, strategic approach to influencing technology decisions for the long-term health of their organization. Here are a few of the issues boards should pay attention to in 2021 and beyond.

Strengthening board M&A oversight in an uncertain time

December 2020

Among the matters that have the greatest relevance to the long-term success of a company is its strategy for mergers and acquisitions (M&A). Executive leadership must have the right skills to develop the strategy, pursue the deals, and execute when the time comes. Boards must fulfill their role in overseeing and guiding management’s M&A pursuits—ensuring that management stays aligned with the strategy, conducts effective diligence, and actively guides value-creation efforts through completion.

Rethinking the future of privacy

December 2020

Prior to the effective date of the European Union’s General Data Protection Regulation (GDPR)1, privacy was largely viewed as a “compliance” exercise, with the ramifications for a lack of “compliance” rarely, if ever, necessitating board-level attention. But when the GDPR became effective, the role of the board in consumer privacy changed significantly, whether you were a European Union-based company or not. In what seemed like the blink of an eye, the impacts of noncompliance suddenly mattered and could not be ignored. The privacy world hasn’t been the same since, and it may never be the same again.

How boards can support the black workforce

November/December 2020

As individuals reflect on their roles in perpetuating systems of racial injustice, they’re calling on organizations to do the same. This has created a special moment in history for boards and executive leadership as they respond to demands for addressing workforce inequities and bolstering broader diversity, equity, and inclusion (DE&I) programs. To address these issues internally, boards and executive leaders may want to focus on the four following actions: listen, engage, acknowledge, and do.

Today’s boards need modern workforce metrics

October 2020

Workforce strategies have been evolving for decades to meet the demands of the future of work—from empowering people to work productively with technology, to creating lasting value for themselves, their organizations, and society at large. Yet the governance of those workforce strategies has not kept pace.

Look beyond titles when recruiting directors

September/October 2020

Landmark events of 2020 have ignited a consciousness of systemic racism and social injustice that has heightened and sharpened focus on diversifying the workforce at all levels of the corporation—including the board. However, turning intention to increase diversity of gender, race, and ethnicity into action is where some boards may struggle.

Board inclusion framework: Enabling boards to govern inclusively

August 2020

Diversity and inclusion are central to Deloitte’s values and are embedded in the firm’s culture as core competencies for leadership. Our experience has shown us that to engage diverse talent, build inclusive leaders, and foster an innovative, courageous, and equitable culture, we must start at the top. Boards have a responsibility to lead the way.

Respond, recover, and thrive beyond COVID-19

July/August 2020

The COVID-19 pandemic may be one of the most consequential events in our lives, and additional social unrest has only brought more complexity and urgency for leaders. Just as many members of the “greatest generation” felt the impact of the Great Depression and the Second World War long after, those living through these turbulent times will feel the aftereffects for many years, if not decades, to come. The same can be said for businesses around the globe. All industries—even those that remain successful through these unprecedented events—will be dealing with the repercussions for the foreseeable future. While it is impossible to know what COVID-19 and recent social unrest will leave in their wake, companies, with the oversight of their boards, must take action to move beyond merely responding to these events and toward recovering and eventually thriving.

Keeping culture top of mind in the boardroom

May/June 2020

COVID-19 and the challenges of managing a displaced workforce are highlighting the importance of board oversight of corporate culture. Despite the competing demands for directors’ attention, the importance of governing culture has not diminished. If anything, it is more important than ever. A strong corporate culture provides the foundation for business resiliency, allowing a company to better respond to disruption and support its employees in a time of uncertainty. It also provides a framework for protecting critical assets, including reputation, intellectual property, and talent, so that the organization can rebound more quickly.

How to create a board culture of inclusion

March/April 2020

Diversity brings many different dimensions of value to organizations operating in an increasingly complex environment. From increased creativity to stronger governance and improved problem-solving abilities, diversity equates to better business outcomes. From a governance perspective, we’ve seen anemic progress in diverse representation. For instance, in the Fortune 500, women hold just under 23 percent of board seats and minority men hold below 12 percent. And, when it comes to diversity of experience, director recruitment continues to prioritize classic skills such as executive leadership and finance over deep entrepreneurial talent and technology experience.

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Harness the power of ESG transparency

January/February 2020

Sustainability is going mainstream. The number of S&P 500 companies publishing some form of sustainability disclosure increased from 20 percent in 2011 to 86 percent in 2018, according to data from the Governance & Accountability Institute. Furthermore, the Investor Responsibility Research Center Institute found that 40 percent of the S&P 500 now voluntarily address some aspect of sustainability in financial filings. Companies are also recognizing that simply providing data may not go far enough for investors; accordingly, 36 percent of S&P 500 companies now obtain assurance on select environmental, social, and governance (ESG) information in their sustainability reports, and three percent obtain assurance on sustainability reports as a whole.

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The tech-savvy necessity: Preparing the board to go beyond the digital frontier

January/February 2020

Technology governance and oversight in the boardroom, in recent years, has largely reinforced the necessity to defensively protect and preserve an organization and its assets. Increasingly, boards are shifting the tech focus to understand how technology can also be leveraged offensively to create and enable new opportunities, business models, and revenue sources. As a result, many board members are seeking to understand the business impact of emerging technology trends to better exercise oversight without stepping into management’s role—in other words, keeping their "fingers in and noses out."

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