No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Governance

The 2020 Landscape: What Boards Should Expect

4 Governance Trends Corporate Boards Need to Know About

by Paula Loop
January 27, 2020
in Governance
woman in yellow backpack looking out over landscape

Last year was a headline-making year in the governance space, with the evolving purpose of a corporation and other prescient topics generating national attention. PwC’s Paula Loop highlights governance trends boards need to be aware of in 2020.

It’s 2020 – the beginning of a new year and decade – and the dialogue and sentiment around business is changing. What are the big topics of conversation going to be this year? There are several.

For one, there will be more conversations about the role of the corporation as expectations grow for companies to define their purpose and balance the interests of their broader stakeholder group. Topics like social issues, talent matters and corporate culture will also set the tone for 2020. And crisis management will be a common topic of discussion – because any topic can easily manifest into a crisis, and boards need to be prepared.

Here is a snapshot of what’s happening and what your board needs to know to get your arms around this changing sentiment:

1. A Continued Dialogue on the Purpose of the Corporation

After decades of general support by U.S. businesses for Milton Friedman’s view of shareholder primacy, the thinking about a company’s purpose has started to change. BlackRock CEO Larry Fink’s recent letters to shareholders and the Business Roundtable’s August shift in its “the purpose of a corporation” statement have sparked a new dialogue. The statement says companies should commit to deliver value to customers, invest in employees, deal fairly with suppliers, support communities and generate long-term value for shareholders. This conversation will likely be the headline for 2020, with greater expectations for companies to consider the interests of their broader stakeholder group as they look to create value.

The needs of different stakeholders may not always align or may even be in conflict, though, so management, the board and investors will have to work together to find the right balance when determining how to define their purpose and how to measure, report and communicate success.

2. Social Issues Take the Spotlight

ESG (environmental, social and governance) is an increasingly common topic of conversation in the C-suite and boardroom, and it ties directly into the purpose conversation. While environmental issues have gotten most of the ESG attention in recent years, the “S” category of social issues is what will likely take some of the spotlight in 2020. Social issues include privacy, human rights, diversity and inclusion and worker health and safety, and they matter to a variety of stakeholders — customers, employees and investors, both institutional and individual, among others. Nearly three-quarters of Americans consider social issues when making a decision to invest in a company, a recent survey showed.

While social issues are intangible and therefore may be more difficult to measure, they can still impact company performance. Boards can expect more investor engagement around social issues that are important to society, communities and employees.

3. An Increased Focus on Talent and Talent Management

While there are elements of talent that fit into the social category of ESG, this is another topic that can stand on its own. Even though talent is not listed on a company’s balance sheet, it is likely one of a company’s biggest assets today. Talent management is both an important and volatile focus for companies and boards alike given today’s tight job market. The ability to attract and retain top talent is increasingly competitive and can be a differentiator for companies.

Talent also ties in closely with purpose. Workers today want more than just a job with a good paycheck. They want their work to have meaning and to work at a company that has integrity. In fact, a recent PwC survey found that 62 percent of job seekers said they’re more likely to apply for a job at a company that is openly committed to improving diversity and inclusion in their workforce. And 33 percent of C-suite candidates said they’d take a pay cut to work for a mission-driven company that aligns with their ideals.

Talent and human capital are top of mind for some institutional investors, too. BlackRock, for example, sees “a company’s approach [to human capital management] as a potential competitive advantage.” State Street says it’s “a core asset and driver of long-term sustainable performance.” Both investors say they plan to engage with companies on the topic in 2020. The SEC has also proposed enhancements to human capital disclosure. Boards should consider how their companies are communicating their talent strategies and whether they could be doing a better job. They should also take a fresh look at their role in talent management oversight.

4. The Importance of Corporate Culture

A company’s culture often proceeds from its purpose, and it drives strategy. A strong corporate culture can enable business and promote innovation. It can help attract and retain talent and contribute to the company’s long-term success. A positive culture is an asset to your business. But culture can also impede business. A poor corporate culture can promote unethical behavior and produce disengaged employees. It can set the stage for all sorts of things to go wrong. And when things go wrong, they can quickly swell into a crisis. The board’s role in overseeing culture is critical: Nobody wants to be the company making headlines for a corporate culture problem.

Culture can be challenging to understand, however, because it’s intangible. Boards can get a better sense of their company’s culture by looking at data and metrics — what customers and employees are saying and what’s on social media and job sites. When there is a weak corporate culture that needs to change, don’t expect a transformation overnight. To shift to a stronger culture — one that’s an asset — you need a thoughtful and focused strategy with set tasks to achieve. And you need to incent people to take the steps forward.

Crisis is the New Normal

All of these things are interconnected. And any one of them can quickly spiral into a corporate crisis. These days, a crisis is almost inevitable: 98 percent of U.S. executives expect to see a crisis in the near future, according to PwC’s 2019 Global Crisis Survey.

Some crises can be avoided — if your company is well prepared. But being prepared means more than just having a crisis response plan. That’s certainly important, but a plan needs to be reviewed and tested, and companies need to get actual value from it. It’s also important to remember that an ounce of prevention is worth a pound of cure, so having a strong culture, internal control environment and risk and compliance program and an updated and well-defined succession plan for key executives are baseline “hygiene” efforts that could prevent or be helpful in any crisis.

When a crisis does hit, it’s easy to make mistakes. But knowing what to do and what common mistakes to avoid can be the difference between just getting through a crisis and emerging from one a stronger, transformed company. Crisis is a big risk to all companies, and crisis management is critical to survival. Boards play an important role in making sure the company is getting crisis planning right.


Tags: Board of DirectorsCorporate CultureCrisis ManagementESG
Previous Post

Compliance Program Assessments and Moral Hazards

Next Post

Suffering from CCPA Compliance Nightmares?

Paula Loop

Paula Loop

Paula Loop headshotPaula Loop is the leader for PwC’s Governance Insights Center. With more than 20 years of experience at PwC, Paula brings extensive knowledge in governance, technical accounting and SEC and financial reporting matters to both organizations. Paula is a Certified Public Accountant licensed in New York and is a graduate of the University of California at Berkeley with a B.S. in Business Administration.

Related Posts

JTC ESG and Impact Investing_f

The Evolution of ESG & Impact Investing: Are You Ready?

by Corporate Compliance Insights
March 30, 2023

Making money *and* doing the right thing Survey Report The Evolution of ESG & Impact Investing: Are You Ready? What’s...

wind turbines

What Companies Around the Globe Need to Know About EU Sustainability Reporting

by John Peiserich
March 28, 2023

By the beginning of next year, large companies in the EU or that do a substantive amount of business in...

boards

Moving on Up? Before Reaching for a Board Seat, Make Sure You Understand Public-Private Nuances

by David Roberson
March 28, 2023

Compliance is a huge part of the job description for any member of the board of directors, so it’s no...

Speeki Academy Workshop London: An introduction to a corporate ESG programme, with Scott Lane

Speeki Academy Workshop London: An introduction to a corporate ESG programme, with Scott Lane

by Corporate Compliance Insights
March 20, 2023

The task of implementing an effective ESG programme in an organisation can be challenging, but it's also an exciting opportunity...

Next Post
illustration of young boy sitting on bed facing a monster in a nightmare

Suffering from CCPA Compliance Nightmares?

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT