Across the Board-Episode 22

In this very special episode of Across the Board, I continue my celebration of 1000 podcasts on the Compliance Podcast Network. In this episode of Across the Board. I visit with Sheila Hooda about the changes she has seen at the Board level over the past five years. Sheila provide a fascinating look at the changes she has seen corporate governance, risk management and the strategic use of risk by Boards of Directors; all in the context of Board developments.

Change is constant. We expect that with the continued scrutiny and heightened expectations that boards continue to face from regulators and investors and a wide base of stakeholders we will continue to see more positive evolution of Corporate Governance. Over the past 5 years, Corporate Governance has evolved and “grown up” with an increasing focus on transparency, disclosure, dialogue with stakeholders and attention on relevance in a rapidly changing economic environment. Some of the topics we consider are:

1. What has changed in the past 5 years in the global economy?

- accelerating pace of technology disruption;

- increasing wealth globally;

- demographics and the rise of the millennial generation brought up on higher wealth and technology access;

- rapidly changing customer preferences largely brought on by technology and information access;

- social including movements like #MeToo, environmental and climate change risks becoming more evident; and

- increasing power and stature of institutional investors.

2. What has been the implications of these changes on corporate governance?

A) Board oversight of Strategy and Risk has risen to the top of the Agenda.

1) disruption, competitive advantage and sustainability are part of a board’s fiduciary responsibility;

B) Boards are increasingly focused on Culture as a strategic asset;

C) Oversight is Talent has now become a key as a competitive differentiator;

D) Shareholder engagement and dialogue around governance, strategy, performance and compensation has seen increasing attention. Boards increasingly have to deal with large institutional investors who tend to be longer term oriented and more short-term oriented activists;

E) Board quality and composition is getting increasing focus with attention to skills, evaluation, turnover and terms, over boarding and diversity;

F) Environment, Social and Climate change issues are seeing rising investor attention and becoming a board priority; and

G) Institutional Stewardship has risen significantly as the power of the largest index investors has become concentrated with 3 players who remain focused on good governance, societal benefits and diversity.