No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • 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
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights
Home Featured

Culture, Digital Transformation and Other Concerns Boards Must Be Ready to Discuss

A Corporate Board’s Guide to 2019 Shareholder Meetings

by Amy Rojik
May 1, 2019
in Featured, Governance
people icons standing on sections of pie chart

As corporate boards gather for annual shareholder meetings, the issues in the spotlight are defined by forces driving both business growth and risk. BDO’s Amy Rojik offers suggestions for how boards can be prepared to communicate with stakeholders this year.

For corporate boards, spring marks the arrival of annual shareholder meeting season. Every year, shareholders gather for board meetings armed with questions and concerns that, if not sufficiently addressed, may hamper their confidence in a business’s ability to manage risk and sustain long-term value creation.

In 2019, the list of issues on boards’ radars are defined by the forces driving both business growth and risk, in equal measure. This year’s key areas of shareholder concern can be grouped into four categories: digital transformation and data protection, people and culture, market movement and regulation and reporting. Here are some suggestions for how boards can address them.

Digital Transformation & Data Protection

With organizations facing increasing pressure to streamline and optimize every aspect of their business, digital transformation is at the crux of business innovation. As a result, it is nearly impossible to walk into a boardroom without hearing the phrase mentioned. And for good reason — having a digital transformation strategy is no longer optional; it is necessary for survival in today’s digital economy. Corporate boards should expect shareholders to question how much is being spent on digital transformation, who is leading the charge on strategy, what the return on investment is and how the organization compares to its peers. In communicating a digital strategy to stakeholders, linking it to clear key performance indicators (KPIs) and business objectives is critical.

However, with increased digital opportunity comes increased digital threats. Growing in both frequency and sophistication, cyberattacks continue to undermine public trust in businesses — and they are becoming exponentially more costly to navigate. In fact, the SEC reports that the average cost of a cyber data breach is $7.5 million and rising each year.

Further, as emphasis on cybersecurity concerns escalates, so does the interest in how the large amounts of data generated and maintained in the digital economy are being protected. Increasing data privacy and data protection regulations internationally (e.g., GDPR) and at the state level (e.g., California Consumer Privacy Act) are redefining the way sensitive consumer information should be handled and protected.

With large amounts of data being the target of cyber breaches and the significant reputational and financial damage breaches can cause, shareholders will be eager to learn how the company’s board is approaching these issues and managing related risks. Board members should be prepared to clearly communicate the organization’s proactive risk mitigation strategies to stakeholders — including shareholders, regulators, employees, customers and others. In the face of such risk, outlining a proactive game plan is an essential step toward building market confidence and offsetting damage when a breach does occur.

People & Culture

Shareholders are beginning to focus more closely on the ways corporate boards are driving a positive culture within their organization. No longer is communicating the organization’s stance on topics such as talent management, executive compensation and overall corporate culture simply a best practice. With shareholders growing more interested in supporting socially responsible organizations and at the same time more aware of the impact these issues have on an organization’s bottom line, readiness to engage in a discussion of social and cultural topics at annual board meetings is prudent.

One aspect of corporate culture receiving particular attention at 2019 shareholder meetings is leadership diversity. According to McKinsey & Company, companies in the top 25th percentile for gender diversity in management positions are 21 percent more likely to experience above-average profits. At the same time, the world’s largest proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, have both recently updated policies to prioritize diversity within the board, particularly with respect to gender, which will influence their corporate governance disclosure reviews and subsequent shareholder voting recommendations.

Given the prominence of this topic, shareholders may want to know where companies stand in relation to the highly publicized California Senate Bill 826 and proxy advisory policy updates, as well as their policies around formal diversity reviews. Organizations and their boards are encouraged to consider the strength of their current board refreshment and recruitment policies and related proxy disclosures, extending discussions around board diversity beyond consideration of gender and ensuring an array of diverse viewpoints.

Market Movement

Amid one of the longest bull markets in history, many analysts are certain an economic downturn is on the horizon, with anyone’s guess in terms of how soon it will occur. Contributing to market turbulence are geopolitical concerns, including trade tensions and uncertainty over a pending Brexit. The change in control of the U.S. House of Representatives and battles over Federal Reserve policy have also ramped up political and economic uncertainty.

Leaders of global businesses should be ready to convey the exposure the organization faces with respect to tariff and trade agreements and how management is poised to take advantage of opportunities or combat disadvantages as negotiations in these areas play out.

Meanwhile, reductions to the U.S. corporate tax rate and tax on repatriation of foreign earnings are fueling renewed motivation for businesses to consider mergers and acquisitions. Organizations should be prepared to address shareholders’ questions about whether M&A is a viable strategy for expansion and how market volatility could impact these plans.

While corporate boards aren’t expected to enter shareholder meetings with a crystal ball, they should be prepared to discuss the steps the organization is taking to mitigate risk amid these uncertainties. This may be done by conducting regular stress tests of the organization’s current business strategies and communicating the results during shareholder meetings.

Regulation & Reporting

Boards and corporate management must be well-acquainted with new regulations and accounting standards in order to anticipate their impact on policies, reporting requirements and organizational systems and controls. This includes updated accounting standards, such as Revenue Recognition, Lease Accounting and Current Expected Credit Loss (CECL), to name just a few.

Shareholders are also growing increasingly interested in nonfinancial forms of reporting as they look to gain a better understanding of the company’s overall sustainability. As such, it is likely that shareholders will seek additional information on how an organization is managing environmental, social and human (ESG) capital, as well as corporate governance. While pressures to voluntarily report on nonfinancial aspects of the business may feel burdensome, organizations are encouraged to view ESG disclosures as opportunities to establish connections with the growing population of savvy millennials, who characteristically may be more focused on such nonfinancial metrics in making both investment and employment decisions.

While still an evolving area in the U.S., boards and management teams are encouraged to consider how voluntary sustainability disclosures may provide investors and key stakeholders with a more complete view of the company’s material risks and opportunities. Communicating these efforts in a material, comparable and useful way allows the organization to more effectively tell its brand story and differentiate itself for shareholders and would-be investors.

While it’s true that in 2019, the issues that corporate boards have to address in annual shareholder meetings are more complex than ever before, organizations should be excited about the prospect of communicating their stories with shareholders and potential investors. Being upfront and well-prepared in thought and dialogue around these considerations will help the organization avoid potential pitfalls in the near term and help to retain investor confidence through the years ahead.

For more information about this year’s most significant shareholder concerns, read BDO’s 2019 Shareholder Meeting Agenda.


Tags: Board of DirectorsCalifornia Consumer Privacy Act (CCPA)Data BreachGDPR
Previous Post

Why Digitally Fit Internal Audit & Compliance Functions are Vital for the Fourth Industrial Revolution

Next Post

IBM, Thomson Reuters Introduce Powerful New AI and Data Combination to Simplify How Financial Institutions Tackle Regulatory Compliance Challenges

Amy Rojik

Amy Rojik

Amy Rojik is a Boston-based National Managing Partner of Governance, Emerging Issues and External Communications for BDO. Amy has more than 25 years of experience in the auditing profession, engaging with financial reporting executives, audit committees and board members. Her accreditations include the American Institute of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She is also a Governance Fellow with the National Association of Corporate Directors.

Related Posts

kroger

Blocked, Sued and CEO-Less: How Kroger’s Board Must Navigate Triple Crisis

by Conor Johnston
June 9, 2025

Failed mergers often trigger talent exodus and shareholder fury, but strategic refocusing on core competencies can turn regulatory setbacks into...

money

CCO Salary Increases Cooling Off

by Staff and Wire Reports
June 6, 2025

35% of executives give boards high marks

todd snyder runway show scarf

Lessons Learned: Todd Snyder CCPA Enforcement Action

by Richart Ruddie
May 29, 2025

Third-party risk, overcollection of data and lax training all cited by California data privacy enforcer

seeing outside the box

Disrupters See the World Differently — and Act Accordingly

by Jim DeLoach
May 13, 2025

Critical differences in culture, technology adoption and talent strategies determine which organizations shape markets and which scramble to respond

Next Post
NextAngles™ Launches Cognitive Regulatory Compliance Solution for Banking Industry

IBM, Thomson Reuters Introduce Powerful New AI and Data Combination to Simplify How Financial Institutions Tackle Regulatory Compliance Challenges

No Result
View All Result

Privacy Policy | AI 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
  • Research
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2025 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
No Result
View All Result
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • 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
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe

© 2025 Corporate Compliance Insights