2017 Agenda: Priorities For Boards, Audit Committees And Private Companies

Board, Audit Committee, Private Company 2017 Priorities

Political swings, global volatility, technology innovations and investor expectations will require deeper board engagement

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Drawing on interactions with corporate directors and business leaders as well as insights from its research, the KPMG Board Leadership Center has published three reports highlighting critical issues for corporate board members, audit committee members and private company directors as they carry out their 2017 agendas. Read all three reports at kpmg.com/blc.


Board Agenda
KPMG’s On the 2017 Board Agenda highlights eight items for directors to keep in mind in the months ahead:

  • Recognize that connecting and calibrating strategy and risk is more important—and more challenging—than ever.
  • Develop and execute the strategy based on total impact.
  • Take a hard look at the board’s composition: Is the talent in the boardroom aligned with the company’s strategy and future needs?
  • Pay particular attention to potential risks posed by tone at the top, culture, and incentives.
  • Reassess the company’s crisis prevention and readiness efforts.
  • Reassess the company’s shareholder engagement program.
  • Refine and widen boardroom discussions about cyber risk and security.
  • Prepare for the new CEO pay ratio disclosure.


“The challenge for every board in 2017 will be to make the most of its time together, focus on what counts, and keep the company’s eye on the long game,” said Dennis T. Whalen, leader of the KPMG Board Leadership Center. “All the uncertainty out there poses risks, but it also presents opportunities. The board’s job is to help ensure the company is taking smart risks, staying agile and being responsive to changing competitive conditions and stakeholder expectations.”


Audit Committees
Key areas of focus for audit committees, include non-GAAP financial measures, implementation of major accounting changes, audit quality and committee effectiveness. “Audit committees continue to shoulder heavy risk agendas,” said Jose R. Rodriguez, partner in charge and executive director of the KPMG Audit Committee Institute. “The new year is a good time to step back and take a fresh look at the audit committee’s agenda. Exercising judgment about what does and does not belong on the agenda will be key to staying focused on the committee’s core responsibilities—financial reporting and disclosures, internal controls, audit quality and continually improving the audit committee’s effectiveness.”


Private Markets
In addition, private company directors will want to pay particular attention to potential conflicts of interest and ensuring that mergers and acquisitions and new financing deliver value.


“More and more regulators around the globe—including the SEC—are focusing on the relationship and potential conflicts of interest between venture capital or private equity funds and their portfolio companies,” said Salvatore Melilli, National Audit Industry Leader, KPMG Private Markets Group. “Be vigilant to identify early on any potential conflicts between the interests of the portfolio company and the investment fund, and work to develop an appropriate course of action.”

About the KPMG Board Leadership Center

The KPMG Board Leadership Center champions outstanding governance to help drive long-term corporate value and enhance investor confidence. Through an array of programs and perspectives—including KPMG’s Audit Committee Institute and Private Markets Group, the WomenCorporateDirectors Foundation, and more—the Center engages with directors and business leaders to help articulate their challenges and promote continuous improvement. Drawing on insights from KPMG professionals and governance experts worldwide, the Center delivers practical thought leadership—on risk and strategy, talent and technology, globalization and compliance, financial reporting and audit quality, and more—all through a board lens. Learn more at kpmg.com/blc.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the
independent U.S. member firm of KPMG International Cooperative (“KPMG
International”). KPMG International’s independent member firms have 189,000 professionals, including more than 9,000 partners, in 152 countries.

Contact:

Elizabeth Lynch
KPMG LLP
201-505-6316 (office)
914-953-1089 (cell)
elizabethlynch@kpmg.com

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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