While the impact on private company boards, management, operations, and disclosure varies—and largely dependent on ownership—a shift is apparent in how institutional investors are directing capital and increasing expectations for private company reporting on ESG.
Audit committee members continue to express confidence in their oversight of core responsibilities. Yet, it’s clear that technological innovation, digital disruption, and the complexity of business are sharpening the focus on risk management and the internal control environment.
The two-day program covered topics ranging from the role and responsibilities of corporate directors and board members’ fiduciary duties to more complex issues related to the oversight of strategy, risk, and cybersecurity; committees; and board/shareholder engagement.
In the current environment, boards will want to frame their agendas to help ensure their companies are prepared for a potential economic downturn—possibly a severe one. Dennis Whalen, leader of the KPMG Board Leadership, offers key areas of focus for boards to consider.
Insights and highlights from the 2019 KPMG Board Leadership Conference, including the economic and geopolitical outlook; the CEO perspective; board engagement in strategy; technology, digital disruption,
data risk, and privacy; long-term performance; shareholder versus stakeholder primacy; talent, diversity, culture, the workforce of the future; and hot topics for board committees.
The top geopolitical risks for 2019, according to Eurasia Group, include the sowing of “bad seeds” for the future, the ongoing trade showdown between China and the United States, an increasingly challenging cyber battle, European populism, and several country-specific developments.
To build on our work in ESG, strategy and the long view, the Board Leadership Center interviewed directors and officers of major corporations, including Morgan Stanley, Tyson Foods, Ford Motor, Microsoft, Mars, and Whirlpool, among others.
Drawing on insights from our work and interactions with directors and business leaders over the past 12 months, we’ve highlighted seven items for boards of private companies to consider as they focus their 2019 agendas on the critical challenges at hand and on the road ahead.
Expectations for greater transparency about the board’s efforts to continually raise its game and help position the company for the future are putting the nom/gov committee squarely in the spotlight. Here are six items for nom/gov committees to consider as they focus their 2019 agendas.
For young and growing companies, particularly those backed by venture capital funds, board building is often more informal and less strategic. Yet a long-term approach to building a strong board as the company grows can make a difference.
In the absence of timely guidance from the government, tax and finance departments will face a number of challenges in preparing the company’s remaining interim and year-end financial statements and tax return filings.
With concentrated ownership and less public scrutiny, diversifying the composition of private-equity portfolio company boards is a significant challenge, yet opportunities to change are just as abundant for these firms as they are public company boards.
Quorum, Out Leadership’s initiative to increase LGBT+ representation on corporate boards, has created Board Diversity Guidelines with recommendations for companies on how to amend their corporate governance language
As head of the world’s largest asset manager, Fink made clear BlackRock’s expectation for a new model of shareholder engagement, “that strengthens and deepens communication between shareholders and the companies that they own.”
Given their oversight roles, how can boards and audit committees help ensure that the company is getting the appropriate insights from data and analytics while taking the necessary precautions to protect the company, its employees, customers, and others?
For a CFO of a new start-up company, this is a time of tremendous opportunity. Roles and responsibilities are being formalized, processes and controls are being implemented, and cultures and capabilities are being transformed.
As an increasing number of firms are driven by intangible, knowledge-based assets and are more frequently funded through private investors, accounting choices are expected to play a more significant role in a company’s success.
Reflecting on the events of 2017 and recent conversations with members of the institutional investor community, several high-level themes related to board operations and board leadership on environmental, social, and governance (ESG) issues are likely to be top of mind for investors this year.
Given the fast pace and complexity of the business environment, it is critically important that the board include the right mix of skill sets and perspectives to help guide the company’s strategy and oversee risk.
KPMG’s report from the 2017 AICPA Conference on Current SEC and PCAOB Developments includes a discussion of the regulatory priorities of new SEC leadership, insight on ongoing implementation efforts and preparation for new accounting standards, and expectations for disclosure and auditing in the future.
Has the cyber risk and security conversation in the boardroom kept pace with the business? Better yet, does the board have the assurance that operations, technology, and risk management are communicating on cyber expectations and priorities?
Board composition is in the spotlight. The business environment is fast-paced and complex, making it imperative that companies have the right people in the boardroom helping to guide strategy and oversee risk.
The roundtable focused on the implications of automation for the board and audit committee; the promise and potential threat of artificial intelligence; and how government, business, and educators must work as one to reskill workers.
Given the expected five- to seven-year holding period for portfolio companies, boards may be able to avoid having to make a switch in two years by being more proactive in assessing the CEO early in the ownership period.
Today, many directors are engaging directly with shareholders on a variety of issues—especially when the company is dealing with a crisis. How is the board engaging with the CEO regarding the company’s governance team?
From our perspective, many of these issues fall under the broad rubric of environmental, social, and governance (ESG), from climate change impacts and worker safety to workplace diversity, executive compensation, and board composition.
An ongoing focus by investors on director quality and qualifications since the financial crisis has compelled boards to consider greater transparency on issues such as board composition, tenure, term limits, and diversity.
Given heightened investor expectations for transparency in governance and oversight, having a well-executed plan for communicating the company’s story and gauging investor sentiment on key issues is critical.
Shareholders, regulators, and the media have a laser-like focus on CEO compensation packages. In this environment, it’s important that boards understand the issues that are at the center of the compensation debate.
Investors are concentrating on what companies are doing—and disclosing—about the potential impact of climate-related risks on business models and operations, leading to calls for climate-competent boards.
How Compensation Committees can create better alignment between corporate strategy and compensation programs to drive long-term value for the organization and move beyond today’s good governance standards.
Three years after the JOBS Act was signed into law, we talk with Kate Mitchell, partner and cofounder at Scale Venture Partners, about the impact on private companies and their governance.developments.
In a start-up climate that is becoming more attuned to company culture, many venture investors we work with say that a working knowledge of corporate governance for early-stage company founders is a critical factor for funding negotiations
What information is key to assessing whether management has its arms around cyber risk? Certainly, the audit committee needs to hear from a Chief Information Security Officer or Chief Information Officer who is knowledgeable and can help them see the big picture. But what should be the key areas of focus? While the answer will vary depending on the situation, we suggest four areas of focus.
From strategic growth opportunities and supply chain risks, to managing an extended global organization and ensuring regulatory compliance in far corners of the world, the challenges of globalization increasingly call for international perspective on the board.
How a company manages environmental and social issues—and connects these activities with strategy—are important signals to investors of how well the company is run and its long-term financial sustainability.
The potential impact of blockchain—on how business transactions and legal contracts are executed and recorded, IP/data protection and privacy, fraud prevention, voting, auditing, and more—is so fundamental and wide-reaching that observers and early adopters are comparing the current blockchain ecosystem to the early days of the Internet
Sunny Vanderbeck, a managing partner and co-founder of Dallas-based Satori Capital, is trying to prove that a stakeholder-centric approach to private equity investing can generate returns at or above market expectations.