Focusing on what counts
The demands on the board’s time and agenda continue to mount as a host of critical issues—from cyber risk and business model disruption to investor scrutiny and regulatory demands—collide and reshape the landscape. As the business and risk environment becomes more complex—driven by technology change and innovation, global markets and supply chains, geopolitical risk, and more—the board’s ability to prioritize and devote enough time to substantive issues becomes more vital.
Given these challenges, two critical questions should be top of mind for directors today: Is the board focusing on the issues that are most material to the company’s success—e.g., strategy, talent, compensation, key performance indicators, and corporate culture—and connecting the critical dots? Is the board taking a hard look at itself to ensure it has the skills, dynamics, leadership, and processes in place to make the most of its time together and position the company for the future?
KPMG’s Spring Director Roundtable Series gathered directors and executives in 16 cities to explore how boards are addressing these challenges as the business and risk landscape redefines what it means to be effective. As one director said, “We seem to be at an inflection point for corporate governance, with the business and risk environment becoming increasingly volatile, while the expectations for board performance continue to grow.”
The roundtable discussions highlighted four pivotal questions for boards to consider in assessing whether they are meeting today’s governance challenges.
- Is the board’s agenda evolving to stay focused on the “right” issues?
- How is the level and nature of the board’s engagement changing?
- How effective is the board in dealing with board composition and succession planning?
- Has the company enhanced its engagement with major institutional investors on strategy, board composition, transparency, and other issues of importance to them?
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