Six things that boards should keep in mind as they consider and carry out their 2016 agendas.
Drawing on insights from interactions with directors and business leaders over the past year, here are six items for boards to keep in mind as they consider and carry out their 2016 agendas:
1) Deepen the board’s engagement in strategy and assess the continuing validity of assumptions at the core of the strategy: given global volatility and uncertainty—and the forces disrupting corporate business models and entire industries— the board’s traditional “review and concur” role in strategy is no longer adequate. Addressing these uncertainties and market forces requires a new level of board engagement in strategy, working closely with management in a “continuous process”.
2) Make talent development a strategic priority: the findings in KPMG’s Annual CEO Survey point to an increasing gap between talent needs and talent resources— created in large measure by the impact of globalization, digitization, and demographic shifts, as well as increasing expectations that functional leaders (R&D, technology, HR, finance) take on more strategic roles.
3) Reassess the company’s vulnerability to business interruption and its crisis readiness: as illustrated by recent geopolitical turmoil and terrorist acts, natural disasters, threatened pandemics, cyber breaches, and more, the global interconnectedness of business poses challenges for virtually every company.
4) Refine and broaden boardroom discussions about cyber risk and security: despite the tremendous focus on cybersecurity, the cyber-risk landscape remains fluid and opaque, even as expectations rise for more-engaged oversight. As the cyber landscape evolves, board oversight—and the nature of the conversation—must evolve as well.
5) Promote effective engagement with shareholders, including the activists: boards can expect shareholders to continue to seek greater input on issues such as proxy access, say on pay, board composition and refreshment, political contributions, and corporate social responsibility. Understand how management communicates and engages with its key shareholders, and clarify the board’s role in investor communications—particularly on issues such as executive compensation and board leadership.
6) Keep board composition front and center: continually assess whether the board has the right mix of skills, backgrounds, experiences, and diversity of thinking, and work effectively as a group.