There’s a lot going on in the growing world of professional governance. There’s been an uprising in the focus of capturing the engagement of shareholders. Heavy evaluations are being placed on directors. Diversity is spread out through the entire board. And ESG pressures have continued to evolve over time. And human capital is at the center of it all.
There’s a lot on the plate for governance professionals. We’ll be covering some of those issues here. Stay tuned for information on board oversight and diversity, board evaluation, and the vast amounts of information presented by technological advancement.
Oversight Of The Board
Investors do not turn a cold-shoulder to real-world problems. There has been a slew of high-profile cases on the sexual misconduct of men in leadership roles. And this has led to many investors wanting to learn more about company practices. How are the boards keeping this kind of behavior in check? How do the companies deal with these incidents?
Companies are starting to make amendments to their charters. In some cases, boards are less-likely to publicly offer support to an official who is under accusation. Many changes are happening in the Human Resources departments in general. Governance professionals must consider these changes as decisions are being made.
Diversity Throughout The Board
Investors consider the diversity of boards. More specifically, gender diversity seems to be a hot topic for pressure groups and investors. Governance teams work hard to promote diversity and equal opportunity across the board. But the results have been mixed. Large Fortune 500 companies still seem to hover at less than 25% of women making up the workforce, although some individual companies have made astounding leaps in diversification.
Minimum thresholds are constantly sought. But aside from this, there are also processes that are being developed for helping diversify the boards. Governance professionals look to continue improving upon these processes. Investors seem to realize that change won’t happen instantaneously.
There have been big changes over the years in board evaluation. While surveys used to do the trick, more and more companies are seeing live interviews become a reality. On top of that, reviews are happening more regularly. Instead of having a review every 2 years, companies are switching to annual reviews.
Board evaluations are important topics for governance professionals. These evaluations can help boost a company’s performance, and also help to promote diversity within the company. More company-disclosure is expected in the following years, as more investors look towards the inside of companies and their workforce practices.
Vast Amounts Of Information
The governance landscape has been filled with many new tech tools over the past years. For example, board portals have become popular among professionals. The big thing about portals is the fact that there is so much information involved in them. It can be overwhelming.
Companies and boards are trying to find ways of highlighting the key information from these portals so directors aren’t overloaded with information. But there are also “old-school” people who believe hard-copies are still best.