Across the Board
Boards Rethink Succession Plans Due to Pandemic
“A number of boards at the largest companies – though perhaps fewer than some governance observers might expect – have updated their succession plans as a result of the pandemic, according to new research from Corporate Secretary…. Approaching a third (29 percent) of respondents at mega-cap companies say their board revised its approach to succession planning due to the pandemic, Corporate Secretary’s study finds. By comparison, 17 percent, 19 percent and 8 percent of those at small caps, mid-caps and large caps, respectively, say their board had a rethink as a result of the crisis. It should be noted that, globally, more than a fifth (23 percent) don’t know whether this has been the case.” CORPORATE SECRETARY
CEOs Face An Updated Job Description
“Today’s challenges, from the pandemic to ESG to ongoing efforts to address racial inequity, have only woven business and society more tightly together. Indeed, 86% of CEOs and board members see business and society becoming more interconnected, and two thirds of the American public want CEOs to take a stand on social issues…. If CEOs are to deliver against their new job description, they must become a different type of CEO: an enterprise leader who also stewards the ecosystem in which their business operates, including customers, suppliers, partners, competitors, governments, and their local community.” HARVARD BUSINESS REVIEW
Ahead of State Requirement, Microsoft to Disclose Salary Ranges
“Microsoft said it would soon start to disclose salary ranges for all job postings in the U.S., becoming one of the first major employers to take such a step amid new requirements from some local officials for pay transparency… the software giant said it would publicly disclose salary ranges for internal and external postings across the country starting no later than January 2023. Last month, the company promised to boost merit raises and stock awards this year as it battles for talent…. The move comes after its home state of Washington adopted a law earlier this year requiring such disclosures on job postings starting next year.” WALL STREET JOURNAL
Governance Expectations Are Changing For Private Companies
“With more companies leaving the public markets, executives and board directors of these newly private companies should expect governance changes as regulators push for more transparency from certain nonpublic companies. … [They] face less regulatory scrutiny, including filing fewer reports to the Securities and Exchange Commission, and can focus more on long-term strategic goals as opposed to meeting quarterly earnings expectations. This may change, though, if the SEC moves forward with plans to require more routine filings on private companies’ finances and operations, …. Private company directors also operate with fewer external pressures, but can feel more of a squeeze from a smaller number of shareholders, who—with larger, more concentrated stakes—may wield more influence on a private company.” WALL STREET JOURNAL
Study: Even On Diverse Boards, White Men Dominate Discussions
“Research shows that heterogeneity in groups boosts the quality of decision-making. Yet little evidence has persuasively linked increased board diversity with improved firm outcomes. A new study explores why and suggests conditions that can help…. Researchers worked with the auditors of 54 U.S. public companies to code the transcripts of every board meeting from 1994 to 2006 to determine the number of minutes each director spoke.… Controlling for the differing sizes of corporate boards, each white man spoke, on average, for 11% of the total annual board meeting time, whereas each Black man spoke for just 4% and each woman just 8% of the time.….” HARVARD BUSINESS REVIEW
What Boards Need to Know About Cryptocurrencies
“Digital assets are disrupting the entire financial market, driving changes in the financial ecosystem…Digital assets—including cryptocurrencies, stablecoins, tokens, and non-fungible tokens (NFTs)—are items of value that exist only in digital form…. Given their duty to oversee strategy and risk, boards have a responsibility to understand this dynamic new market to grasp the opportunities and risks that are swiftly evolving for the companies they oversee…. With an understanding of the broad opportunities digital assets portend, boards should also understand the scope of risks. Strong governance over risk and controls is critical. Boards should be prepared to engage with senior leaders on a number of risk areas.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
From the Boardspan Library
How to Talk to Your Board About Risk
“Board members and company managers today need to have a clear and informed view of risk. The business world is fraught with risks to strategy that emerge more quickly and pack a bigger punch than ever before. Moreover, there are new sources of risk—for example, fast-moving innovations in technology… scientific breakthroughs, and the ever-evolving realm of social media…. The first step in having meaningful conversations with the board about risk is collecting the right information to share… When leaders set the tone that risk management is everyone’s business and put structures in place to support it, the data emerges effectively.” S+B via BOARDSPAN
