3/9/23 – Issue 8.08 – Your weekly news on all things board. 

Risk management is a job that never ends for boards and company leadership. Just staying aware of the myriad risks to your organization takes ongoing work. But faced with those risks, boards face another challenge: Where do you start? Given multiple risks, how do you prioritize where to focus your efforts? As the types of risk increase, it gets harder to make those decisions without analysis and advisory. This week, what the risk agenda looks like in 2023; and one company’s way of reporting risk to the board and the C-suite. 

In other news: The “engagement priorities” of big investors this proxy season; A lawsuit continues for Shell and another one begins for JetBlue and Spirit; The shared oversight responsibility of the board and corporate officers; And a look at why you want to join Abby Adlerman and Tarang Amin for our March 29 webinar. 

In the Spotlight

2023: The Year of the Risk Agenda

Risk looks different for every company. But here are some of the common risk areas that might be on the radar in 2023.

“A complete list of the risks to be overseen in 2023 might be very lengthy, but a survey reported in the Audit Committee Practices Report suggests that the following areas are most likely to be the subjects of audit committee risk oversight in 2023: disclosure, including financial reporting, internal controls, and fraud; cybersecurity; effectiveness of the enterprise risk management program; environmental, social, and governance (ESG) reporting and disclosure; inflation; and digital transformation. We address some of these, as well as other risks, below.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

At One Company, How a Risk Dashboard Helps the Board Quantify and Manage Risk
At Anheuser Busch InBev SA, a digital dashboard helps technology and legal teams, as well as the C-suite and board, get a better picture of risk around the world.  

““The platform, called Lighthouse, helps AB InBev’s technology and legal groups coordinate to address cybersecurity threats and privacy problems that in the past weren’t on everyone’s radars, said Rodrigo Cunha, global director for legal, ethics, compliance and data protection at the maker of Budweiser and Stella Artois…Corporate cybersecurity leaders often fall short of properly translating technical assessments into business terms so that C-suite executives and board members can properly evaluate them, said Lucia Milica, global resident chief information security officer at cybersecurity firm Proofpoint Inc. That has to change, she said, because regulators are increasingly scrutinizing companies’ security defenses.” WALL STREET JOURNAL

From Boardspan this Week:

Jim Cramer and Tarang Amin Talk About Success and Diversity

One of the reasons we’re so excited to have e.l.f. Chairman and CEO Tarang Amin as our guest on our upcoming webinar is because he has a great story to tell. It’s a story of knowing your market and representing that market, from your workforce to the board of directors.

Check out this CNBC clip from Jim Cramer’s Mad Money, where Jim talks to Tarang about the continued success of e.l.f. Beauty. CNBC via LINKEDIN 

Boardspan CEO Abby Adlerman and Tarang Amin will be in conversation about how the relationship between the CEO and the board plays a part.

The Board and the CEO: How a Strong Partnership Leads to Success

Wednesday, March 29

2pm ET

Across the Board

BlackRock and Rockefeller Set ESG Priorities for 2023

The big investors publish their “engagement priorities,” which may give insight into where they focus their attention and votes.

"At BlackRock, the firm says its main area of focus is ensuring corporate boards have independent directors who can be “the voice of shareholders” in board discussions on topics ranging from climate-related risks to long-term business strategies. Rockefeller singles out biodiversity, climate action and human rights among its key themes to watch.” BLOOMBERG

Behind the Unique Environmental Suit Against Shell

ClientEarth’s environmental suit against Shell is unique in that it targets the board of directors specifically, citing their failure to align with the Paris Agreement. 

“Last month, environmental law firm ClientEarth announced that it was taking Shell to court. This may not sound out of the ordinary. But what makes this case different is that there are real people at the center of it. This time it’s not a corporation that’s liable, it’s their Board of Directors. ClientEarth says that the 11 members of the board have breached their legal duties by failing to adopt a transition strategy that aligns with the Paris Agreement. Essentially, Shell’s Board isn’t doing enough to manage the risks the company faces because of climate change…The other extraordinary thing is that the law firm isn’t acting alone: they are backed by investors who hold 12 million shares in the fossil fuel giant. ClientEarth, crucially, is one of these investors.” YAHOO

The Justice Department Files an Antitrust Suit to Block JetBlue’s Acquisition of Spirit Airlines

The takeover would create the nation’s fifth largest airline. 

“JetBlue’s plan would eliminate the unique competition that Spirit provides—and about half of all ultra-low-cost airline seats in the industry—and leave tens of millions of travelers to face higher fares and fewer options,” the Justice Department said in its complaint, filed in a Massachusetts court on Tuesday. “Spirit itself put it simply: ‘A JetBlue acquisition of Spirit will have lasting negative impacts on consumers.’” CNBC

Corporate Officers and Directors Share Oversight Duties

A Delaware court upheld for the first time that the same oversight duty board directors have, is equal in responsibility to that of corporate officers. Officers should implement systems that will alert of red flags and the board should be overseeing the design of such systems. 

“For the past several years, boards of directors have increasingly faced claims that they have failed in their duty of oversight. These so-called Caremark claims can arise in a number of contexts involving allegations of systemic failures or intentional wrongdoing. Recently, the Delaware Court of Chancery held for the first time that officers owe the same duty of oversight as directors, an expansion of Caremark which had previously only been applied to directors.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

Seat at the Table 

• Boeing welcomes to its board Sabrina Soussan, Chair and CEO of Paris-based utility company Suez SA

• Imax elects to its board Gail Berman, Chair and CEO of production company Jackal Group; and Jen Wong, Chief Operating Officer of Reddit

• Technical platform American Software adds to its board Nicole Wu, Chief Financial Officer of software company PDI Technologies

• Oncology company Corbus Pharmaceuticals appoints to its board Dr. Yong Ben, Venture Partner at Eight Roads Venture

• Bath & Body Works announced to its board Thomas Kuhn, Managing Member of investment firm Doorbrook LLC

• RNAi therapeutics company Alnylam welcomes to its board Peter Kellogg, EVP and Chief Corporate Strategy Officer of pharmaceutical company Celgene

• Digital platform Wix elects to its board Gavin Patterson, former President and Chief Revenue Officer of Salesforce; and Francesco de Mojana, Founder and CEO of investment firm Buono Ventures Holding 

About Boardspan
Boardspan is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, benchmarking analytics and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.