In "The 2020 landscape: what boards should expect," PwC homes in on the now-familiar themes of corporate purpose, ESG (with an emphasis on the "S"), talent management/HCM, corporate culture, and crisis management - each buttressed by relevant data to support the need for board focus in 2020.
Key takeaways include:
- Corporate purpose - Boards and investors may need to work together to determine how to address disparate stakeholder interests, particularly since even different investors have dissimilar views. Data points: BlackRock CEO Larry Fink’s 2019 letter to CEOs (reported on here) and the BRT August 2019 ”Statement on the Purpose of a Corporation"
- ESG - PwC expects social issues, e.g., privacy, human rights, D&I, and worker health and safety - which are of interest and concern to a broad spectrum of stakeholders including customers, employees and institutional and retail investors - to be the most prominent of the "ESG" issues in 2020. Data point: Allianz ESG Investor Sentiment Study (reported on here)
- Talent management/HCM - This is likely one of the company's most significant assets, is increasingly characterized as a competitive differentiator, and is a key area of major institutional investor focus. Data points: PwC's "The future of recruiting," and BlackRock's and State Street's stewardship reports (BlackRock reported on here)
- Corporate culture - Long known to have the potential to make or break a company due to its pervasive workforce ethics and conduct implications, corporate culture is now top of mind for investors, who are looking for the board to demonstrate its oversight. PwC suggests boards review data and metrics, e.g., customer and employee feedback, social media, job sites. See this prior PwC piece: "More than a feeling: How do you measure culture?" and our associated report: "Corporate Culture: Metrics Matter."
- Crisis management - In view of the potential for any of these interrelated and frequently controversial or sensitive topics to evolve into a crisis, PwC describes corporate crisis as the new normal. As such, crisis planning and preparedness should be on every board's agenda. Data point: PwC’s 2019 Global Crisis Survey
See our recent report: "Board Agenda 2020," and additional information & resources on these Society pages: Compensation Committees, Corporate Culture, Crisis Management, Director Duties & Liabilities, Human Capital/Workforce Management , and Sustainability/ESG.
Akin Gump's "Top 10 Topics for Directors in 2020" (full report here) fills out the 2020 board agenda with additional top-of-mind topics that bear on the board's oversight of strategy, risks, and opportunities. Notably, management and boards should be proactively evaluating considerations and implications associated with international trade policies and activities, board diversity, workforce pay equity, cybersecurity/data privacy, strategic innovation and emerging technologies, and a potential economic downturn and associated restructuring and/or liquidity implications.
Additional risks such as corporate reputation generally, which is much more vulnerable to being targeted real-time publicly than was the case historically due to social media, and executive harassment allegations that can quickly derail a company, are also addressed.
See our prior reports: "Risk Factors: Trending Now," "Gender Pay Equity: Here's How," "Companies: #MeToo Risk Mitigation," "Cyber Incident Response Plan Testing," and "Every Board Must Be Tech-Savvy These Days," and additional information & resources on these and other Society pages: Board Diversity, Cybersecurity/Data Privacy, Gender & Other Pay Gap/Parity, Risk Management & Oversight, and Strategy. This post first appeared in the weekly Society Alert!