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.”
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.
Drawing on insights from our work and interactions with directors and business leaders over the past 12 months, we’ve highlighted six items for boards consider in their 2018 agendas—on the critical challenges at-hand and on the road ahead.
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.
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.
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.
As a new administration settles into the White House, many are trying to predict what changes may await the corporate governance landscape. But predictions recently have proven to have little value for national and international political outcomes. Instead, when it comes to engaging with shareholders, boards would be wise to stay the course rather than to digress.