There are a number of anticipated key aspects that every board needs to explore for the year ahead. It is helpful to start by thinking of categories of trends, and then to extrapolate the details from there.
One of these categories has to be pending board legislation and board regulation.
While the specifics may vary across different regions and geographies there are some significant global trends to look out for. Just three of these developing trends are people, climate change and reporting.
Included in the board legislation and board regulation trend are ongoing debates concerning the topics of board composition, board tenure, board qualifications as well as director and senior leadership remuneration.
Boards are increasingly under the microscope and being held answerable to a host of new questions. These questions range from “Who sits on the board – and why?”, “What does each member contribute to the board, and why?”, “How much are they/should they be paid – and why?” to “How long should they remain a director, what are the implications of this, and why?”.
Directors must be able to answer these questions with conviction for the boards and businesses they are involved in.
There is increasing pressure on boards in every region to ensure that they have conversations about climate change, sustainability, as well as environmental, social and corporate governance (ESG) – aspects that every sector grapples with.
While the impact of each and every business on both climate and society certainly differs, the responsibility of business as a whole to participate positively and actively into the future is becoming difficult to deny or sidestep.
Change does not happen in the ‘talk-shop’; it happens where the rubber hits the road – exactly where business finds itself every day!
An area of extreme flux at present is that of corporate reporting.
While all businesses wrestle with what to report on, how to report and why they should be reporting on various elements of their performance, the reporting landscape continues to expand and develop constantly.
With added terminology and new (and revised) frameworks being created (and recreated), the internal pressure to conform can be immense. Ensure that you remain up to date and relevant with new and changing language and requirements.
Anticipating these trends and making proactive decisions on what parts of the business to develop and adapt is a key part of the governance role that boards carry.
The worst thing you can do is ignore these trends and simply wait until these ‘decisions’ are imposed from the outside in the form of board legislation and board regulation.