On the 2023 board agenda: Consumer & Retail

Consumer and Retail (C&R) boards can expect their oversight and governance to be challenged in the year ahead by an uncertain economic environment and lingering geopolitical risks and new regulatory demands. A potential recession at the start of 2023—although expected to be shallow and short-lived—will certainly affect consumer buying behavior. Continued global geopolitical uncertainty is putting pressure on greater supply chain resiliency to guard against disruptions and to optimize inventory levels. C&R companies continue to work to retain the right talent as they face into challenging market conditions while also trying to enhance diversity within the company, as well as on the board.

On the 2023 board agenda: Consumer & Retail

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At the same time, C&R companies need to keep moving forward on their digital programs and other strategic initiatives, while managing cybersecurity and increased regulation. Employees, regulators, investors, and other stakeholders are demanding greater transparency and disclosure, particularly around environmental, social, and governance (ESG) activities.

Boards will need to employ a holistic risk management approach to these increasingly interconnected and complicated market dynamics and risks. Drawing on insights from our latest surveys and interactions with directors and business leaders, we highlight eight issues to keep in mind as boards consider and carry out their 2023 agendas:

Maintain focus on the impacts that inflation and economic risks and the movements of consumer confidence and behaviors have on the resulting growth agenda and timing of strategic investments.
Deepen conversations and board engagement in the digital future, including metaverse and direct-to-consumer.
Monitor geopolitical risks impacting supply chain and management’s efforts to build resiliency.
Keep ESG as a priority and embedded in strategic and risk discussions.
Maintain focus on cybersecurity and data privacy as management drives toward increased data analytics capability.
Ensure adequate time is provided to the macroeconomic risks and inflationary impact on merchandise, pricing and promotion, and customer demand.
Have a clear focus on cost contingency plans to gain efficiencies and preserve margins to ensure the long-term strategic plan is not sacrificed.
Think strategically about talent, expertise, and diversity both in the organization and in the boardroom.