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Perspectives

On the board's agenda

Top of mind topics for board members

The Center for Board Effectiveness is pleased to present On the board’s agenda, a bi-monthly publication focused on topics that are top of mind for board members.

A new chapter in cyber

June 2022

An SEC proposal issued in March 2022 to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting has sparked increased discussions about cyber risk in many corporate boardrooms. The importance of the board’s role in promoting a cyber-focused mindset and a cyber-conscious culture throughout the organization cannot be overstated. The board’s oversight role is a fundamental aspect of governance, which includes defined strategies, policies, and procedures to mitigate cyber risk.

Amid geopolitical complexity, uncertainty persists

May 2022

As corporate boards carry out their responsibility to oversee management’s execution of operational, growth, and strategic objectives, they need to consider the many geopolitical and economic issues on the horizon and the possible consequences for their companies. A strategic approach to risk intelligence that leverages scenario planning and advanced risk-sensing techniques may become important for helping companies navigate significant uncertainty.

From next-generation to now: Digital assets

April 2022

An incremental movement into cryptocurrencies can help a company develop a road map for broader adoptions that support the company’s strategy and growth objectives. Adoption will require new processes and controls that span departments. A collaborative effort of the board and its committees with management leaders across the enterprise is critical to help each company prepare for the journey.

What’s all the buzz about the metaverse?

March 2022

The metaverse is a hot topic of discussion in technology circles, and a growing number of consumers and consumer brands are getting on board. Some major companies are placing big bets on the metaverse, or unlimited reality, to fundamentally change the way people interact. As a result, the metaverse is escalating quickly to a topic for boards to address as they consider their companies’ growth and talent strategies, opportunities, and risk profiles.

Tech-savvy board members: A common language for transformation and the impact on performance

February 2022

While it seems reasonable to consider whether a board has the requisite technology skill sets, there has been little, if any, data concerning the impact of having a tech-savvy board on the company’s performance. A study completed by Deloitte Consulting LLP in 2021 analyzed how the “techcentricity” of the board impacts the company’s performance. There may also be an opportunity for a common language around transformation and technology.

The 2022 boardroom agenda

January 2022

The board’s role and responsibilities are dynamic, constantly changing and growing. In 2022, the only certainties are that new challenges and opportunities will continue to arise, and the best boards will continue to be adaptable, meeting those new challenges and opportunities with the skills and determination to be the best they can be.

Director survey: How the pandemic has set new M&A priorities

December 2021

The latest survey, conducted jointly between the National Association of Corporate Directors (NACD) and Deloitte, found that boards are giving M&A activity greater attention earlier in the process, ensuring that a company’s deal strategy is right and that diligence is done properly. The flip side is that they are giving less granular attention to integration planning and to longer-term efforts to assess deal success. Directors also are putting new emphasis on environmental, social, and governance (ESG) considerations in M&A, responding to growing demands from diverse stakeholders and the increased attention management teams are giving these issues.

Considerations and priorities for boards in governing, monitoring, and measuring sustainability

November 2021

The board’s role in governing, monitoring, and measuring sustainability has become increasingly necessary and complex. Deloitte US Sustainability and Climate Change leader Scott Corwin and Center for Integrated Research senior manager Derek Pankratz sit down with accomplished sustainable business scholar, Tensie Whelan to discuss considerations and priorities for boards.

Business not as usual: How the Breakthrough Manifesto and Business Chemistry® can help boards navigate uncertainty

September 2021

Just as we all were ready to shelve terms like “unprecedented times,” the human-centered world is seemingly shifting on its axis again. Continued pandemic hurdles, an increasingly hybrid workforce, and the increasing complexity of the board’s role all mean boardroom dynamics are more critical than ever. As they grapple with ongoing uncertainty, some boards are challenged by tensions with management, or even factions within the boardroom, while others are looking to achieve greater effectiveness by better tapping into their diverse viewpoints and styles. When thorny problems arise, a few principles from the Deloitte Greenhouse may help boards prevail, offering some key tools that could be differentiators for the enterprise.

An alternate universe: The small, young company board

July 2021

Corporate law treats all directors alike; the same standards apply to all directors, regardless of the size, maturity, or other characteristics of the companies on whose boards they serve. All directors have the same fiduciary duties of due care and loyalty, are protected by the business judgment rule, and are expected to engage in rigorous oversight.
However, all companies are not created equal. Size and maturity are among several significant differentiating factors among companies. There are many ways in which small, young companies differ from large, mature ones. Small companies have far fewer resources and may therefore find it harder to be resilient when faced with regulatory, economic, and other challenges. In addition, small companies—particularly those in early stages of growth—may need ongoing infusions of capital to stay alive, much less to grow and thrive. And they may also have less mature and robust systems and processes, including those relating to internal controls.

Trust: A critical asset

May 2021

The responsibilities of boards of directors continue to evolve and increase, particularly given the events of the past year. In addition to perennial topics such as strategy, succession, financial reporting, compliance, and culture, boards are experiencing broader demands on their oversight from expanding stakeholder and shareholder considerations; continuing challenges of the ongoing global pandemic and its aftermath; and addressing the changing role of the corporation in society at large on matters such as racial justice and climate. The growth in the number and complexity of board responsibilities is taking place in an environment of growing skepticism towards our various institutions.

Against that background, companies and their boards can help to address these multiple challenges by considering one of the most critical assets not on their balance sheets―trust.

Incorporating ESG measures into executive compensation plans

April 2021

With the 2021 proxy season underway, environmental, social, and governance (ESG) topics are dominating the conversation. While dialog between companies, investors, and other stakeholder groups has accelerated on a variety of ESG topics, the role of ESG in long-term value creation had already been steadily increasing. According to a recent study, investors that collectively manage $17.1 trillion in US-domiciled assets have adopted sustainable investing strategies, which integrate ESG criteria within investment decisions. Sustainable investing has increased nearly 43% since 2018, demonstrating that the incorporation of ESG considerations into investment decisions has gained significant traction. Many companies now recognize that developing and implementing an ESG strategy is more the norm than an exception and are evaluating how best to demonstrate progress through robust measures and enhanced disclosures.

 

Get ready: How boards can prepare for activism’s next wave

February 2021

As we begin to see the light at the end of the tunnel of a pandemic that upended all of our lives and disrupted almost every business, activist investors are getting in gear, and the pieces are expected to be in place for continued growth in merger and acquisition activity through 2021. Political unrest, accelerating social change, and renewed emphasis on corporate purpose beyond shareholder primacy will continue to shape the future and inject uncertainty. Our world is literally changing before our eyes, and we have to ask ourselves, how will this affect shareholder activism in 2021 and beyond, and what will the impact be on M&A activity? And how have the events of 2020 changed what board directors need to do to be prepared for M&A generally and to deal with activists that might emerge?

The 2021 boardroom agenda: Never let a good crisis go to waste (and more)

January 2021

It seems likely that 2020 will be viewed as one of the most consequential years in recent memory. In addition to dealing with an ongoing global pandemic and the massive economic and social dislocations it caused, the United States has had to address natural disasters such as major hurricanes and wildfires, racial unrest, and a lengthy and challenging political campaign, among other things. While the challenges of any year often influence boardroom agendas for the following year, the impact of 2020 on 2021 board agendas will almost certainly be extraordinary. At the same time, boards will need to deal with many perennial areas of board oversight, including strategy, financial reporting, compliance, and culture. This On the board’s agenda discusses some of the many issues, old and new, that boards will likely have to contend with in the coming year.

 

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