Board Practices Quarterly is a quarterly series of reports, done in collaboration with the Society for Corporate Governance, providing pulse survey benchmarks on relevant topics for boards.
Geopolitical events can quickly disrupt operations, supply chains, and market access, posing significant risks to business continuity and growth. By actively monitoring and understanding these risks, boards can help guide management in developing robust risk mitigation strategies, adapting to regulatory changes, and seizing opportunities that arise from global shifts. Effective oversight can help position an organization to more proactively address emerging challenges, safeguard their strategic direction, and capitalize on emerging opportunities in an increasingly volatile environment. This Board Practices Quarterly is based on a recent survey of members of the Society for Corporate Governance, representing public and private companies. Among the areas covered in the survey were the primary geopolitical risks companies are focused on, management responsibility, how the risks are included on board agendas, board oversight structure, and ways in which companies are mitigating and/or managing these risks.
The potential for artificial intelligence (AI) to revolutionize businesses is immense. For example, it can help improve customer experiences, supply chain optimization, innovation, and decision-making. It can also increase financial, reputational, data privacy and security, and bias risks, and it can yield misinformation. The implications of how AI is changing the business landscape reinforce the need for robust governance practices and board oversight. This Board Practices Quarterly builds upon our 2023 issue, which was also focused on AI. Based on a survey of public company members of the Society for Corporate Governance, it covers company and board AI practices, including functional areas of AI responsibility and implementation; board oversight responsibilities and agendas; and employee utilization of AI tools.
Onboarding and orientation are critical processes that can help integrate new board members into the governance structure and culture of an organization. While specific onboarding and orientation practices vary across companies, done effectively, they can help set the appropriate tone for a new director’s experience and promote critical engagement with the board, management, and other key stakeholders of the organization. This Board Practices Quarterly presents findings from a survey of members of the Society for Corporate Governance that focused on their company director orientation and onboarding processes, including materials provided, management participation, practices and activities, and engagement of external providers.
Corporate culture is a critical area of board oversight. Closely tethered to corporate strategy and risk, culture failures can upend a company. On the flip side, the benefits associated with a positive culture are mission critical and can include business and financial resilience, reputation and goodwill, reduced employee misconduct, and higher employee engagement and productivity. This Board Practices Quarterly looks at how boards oversee corporate culture. It presents findings from a survey of members of the Society for Corporate Governance that included questions pertaining to the board’s role in approving the company definition for culture; where primary oversight of culture resides; information being reported to the board—and how often and by whom; and shareholder engagement.
As the business environment continues to evolve in complexity, so does the oversight role of boards. This Board Practices Quarterly presents findings from a survey of members of the Society for Corporate Governance on the board’s leadership structure, independence, and involvement in a number of business matters, including activities related to corporate strategy, human capital, risk and risk management, and operations.
The CEO is, in many cases, the alter ego of the company to many of its constituencies and is inevitably intertwined with its strategic direction, operations, and reputation. It is therefore not surprising that many posit that CEO succession planning is among the board’s primary responsibilities. This Board Practices Quarterly presents findings from a survey of members of the Society for Corporate Governance and focuses on the CEO succession planning process, including the content of the plan, who has primary responsibility, frequency of review, and related public disclosure.
To keep pace, many boards have expanded their remits to include these topics, which traditionally have been solely within management’s purview. How this is being manifested in the boardroom is the focus of this Board Practices Quarterly. The report presents findings from a survey of members of the Society for Corporate Governance that sought to understand board and committee practices relating to oversight of talent and human capital matters and whether and how those practices have evolved over the past five years.
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