The ever-evolving socioeconomic factors, business trends, and regulations have impacted the way corporations function. Additionally, the pandemic highlighted the increasing importance of corporate board members. In this article at Forbes, Michael Peregrine discusses some significant corporate governance developments that you must be aware of.
Top Governance Developments
Regulations are likely to evolve and become more complex. This means corporate governance practices must evolve and become more tightly managed. Many companies with high levels of liability in their business operations must seek legal guidance to meet the standards. Additionally, organizations must focus on their ethical culture.
“Prompted by the pandemic, the board’s oversight obligation for workforce culture extended to matters of workforce safety,” explains Peregrine. Organizations must prioritize employees’ health and safety concerns while encouraging them to return to physical offices. In many enterprises, vaccination mandates for employees reflected corporate awareness and offered a competitive advantage.
Beyond the global emphasis on good governance, investors are now highlighting environmental and social issues. Today, organizations are facing tremendous pressure to be good custodians of natural resources and the environment as a whole. Therefore, boards and management must determine how best to define, integrate, and oversee the E&S issues that matter to their business.
Several studies have indicated that women professionals have suffered disproportionately from the pandemic-roiled economy. The responsibility lies with boards to assure gender equality within the workplace. In fact, investors also place greater emphasis on diversity. They expect to see more women and ethnic groups on boards and in other leadership positions. Furthermore, investors believe that companies whose culture facilitates growth have numerous advantages, including a loyal workforce and smooth succession planning.
Board and Executive Leadership
It is crucial for the board and executive leadership to support each other to make their vision a reality. In many organizations, pandemic-related challenges and pressures strained this critical relationship. This impacted the responsibilities such as allocation of traditional leadership roles, decision-making, and oversight and reporting.
To read the original article, click on https://www.forbes.com/sites/michaelperegrine/2020/12/17/looking-back-2020s-top-governance-developments/?sh=5aee065e2706.