7 Trending Board New Year's Resolutions

Where Boards?are Planning Continued Focus?in 2023

(Originally appeared in the December 21st, 2022?'Across the Board'?digital publication, a Board Director, Board Advisor, C-Level, and Business Leader publication reaching 28,000+ exceptional business leaders in over 70 countries with articles focused on leadership, strategy, and governance topics - sign up?here )

In recent years, numerous challenges have been introduced?in the boardroom and within leaders' organizations globally, some of which could be considered?"new"?experiences in our lifetimes. The COVID-19 pandemic, remote working on a mass scale, lingering cancel culture & the witnessed leadership?"courage drought"?problem, escalating?employee activism, a seemingly increasing lack of?grit?in leadership, supply chain disruptions, manufacturing hurdles, inflation not experienced in over 4?decades, among many other escalating risks entering boardroom discussions and organization?decisioning processes.

As we quickly?come to the close of 2022, trending is clearly pointing towards common focus areas and concerns for Boards in 2023... and preparation for these challenges within many Boards?and their organizations started in earnest months ago.

The COVID-19 pandemic truly was a catalyst for many Boards globally to reconsider how they better identify, strategize, and govern both negative and positive risk. A great trend being identified through our Board?consulting ?and advisory client engagements shows the increasing acceptance and implementation of Risk Committees on a much larger scale, thus further buying into the value of scenario planning preparation. The deepening agreement within boardrooms that many risks are not simply limited to the financial realm (as it has been a common approach to house all risks within the Audit Committee or Finance Committee) is a welcomed development.

Where are Boards and?Risk Committees, along with CEOs,?increasingly ramping up efforts?in preparation for 2023? There are 7 important, complicated, and interrelated?trends as it turns out. Let's view the emerging?"New Year's Resolution"?list of focus?for many Boards in 2023:

1) Recession Planning & Preparation:?None of us have a crystal ball to accurately predict future markets, however, many organizations are ensuring preparedness for a potential economic downturn. We already see the outcome of this with large-scale employee layoffs within organizations currently experiencing revenue deficits. We also see this within organizations currently meeting forecasts, but harboring deep concerns for 2023. Recession risk has been rising throughout 2022 as monetary policies have steadily raised interest rates in the ongoing battle to curb inflation. Unfortunately, this has not been matched with a slowing of money printing in many regions globally, thus adding continued 2023 recession concerns. In response, Boards are keeping a closer watch on staffing levels and have recently been more open to proposed staffing cuts - a trend being forecasted to continue in 2023.

2) Workforce Attraction & Retention:?The battle for expertise wages on! The skilled worker?shortage seems to be accelerating for many industries, causing much competition in attracting and retaining experienced workers.?Many organizations, when possible,?are being forced to?additionally consider?the option of hiring international remote workers to fill needed expertise gaps. Boards are dedicating an increasing amount of strategy and governance?effort?in this area?due to its direct correlation to meeting the organization's and the Board's?goals.?Human Capital ?(HC) materiality disclosure requirements will also play?an increasing role in bringing these challenges further?to the forefront in 2023.

3) Supply?Chain Preparedness:?Ughh. The?continuing?supply chain challenge ?is getting old - fast. Although a large?percentage of organizations' efforts to correct supply chain issues have somewhat paid off in 2022, many Boards realize that this is not yet fully solutioned. Some Boards are preparing for long-term supply chain changes with far reaching ramifications for their organizations.?Also, an increasing number of?Boards have added recurring supply chain scorecards to their Board Books (Board meeting preparation materials) to ensure this important area is kept squarely on their radar in 2023.

4) Inflation Scenario Planning:?Inflation ?is truly weighing heavily on many Boards currently with deepening discussions on potential outcomes and likely organization knock-on effects. Some will say there is good news for many organizations and investors when pointing towards global economies being relatively strong, however predicted rising interest rates likely point to remaining global concern with pulling off a so-called economic?"soft landing"?in 2023. This is directly tied to the earlier mentioned recession planning & preparation?trending.

5) Automation Opportunities &?Studies:?Linking closely with workforce attraction & retention,?automation options are increasingly being explored. Although?automation has the potential to increase output?and can sometimes help with the lack of skilled workers, savvy leaders know that automation simply shifts the search criteria for qualified talent (more on this topic within a?prior article ). It is predicted that Boards will increasingly task their?CEOs with ongoing studies in 2023 to further identify automation opportunities and viable options for numerous?levels within their organizations.

6) Activism?Preparedness:?Activism?today comes in all forms and can emanate both internally and externally to the organization - savvy Boards are preparing for both instances. Knowing what potentially?"protestable"?risks your organization faces followed by scenario planning can be quite useful. Boards are discussing this topic more openly and in increasing instances making it a recurring agenda topic.

7) Sustainability Disclosures:?Boards are firmly taking stakeholder considerations into account when making decisions (yes, that's an understatement). In today's age of increasing transparency, organizations are expected to demonstrate broader purpose while simultaneously ensuring long-term value. This is making the publishing of sustainability reports a growing expectation. In an effort to satisfy the insatiable appetite of those demanding?ESG ?transparency?along with the desire to elevate the optics of the organization, Boards seem dedicated to carry this upward trend into 2023 and beyond.

These trending 2023 preparation areas prove that Boards are predicting a somewhat tumultuous new year for their organizations. They are rightfully concerned, but as the famous saying goes,?"luck favors the prepared."

What are?your Board's New Year's Resolutions?for?2023?

Reach out ?to learn more?through?our?Board Director Education & Certification program , plus?Consulting &?Advisory ?offerings,?and?International Speaking Tour ?topics.

Mark A. Pfister - Non-Executive Director |?CEO |?Chief?Board Consultant?| Corporate?Strategist | Board Macro-Influencer?| Speaker?| Author - www.PfisterStrategy.com

About the Author:?With a strong focus in Strategy, Governance, and Technology / Cybersecurity, Mark A. Pfister is CEO & Chief Board Consultant of M. A. Pfister Strategy Group, an executive advisory firm that serves as a strategic advisory council for executives and Boards in the public, private, nonprofit, and private equity (PE) sectors. He is also Chairman & CEO of Integral Board Group, a specialized Board services & consulting company, as well as Founder & CEO of the?International Board Director Competency Designation?(IBDC.D) education and certification program, a Board Director certification course recognized globally. Mr. Pfister is a?'Board Macro-Influencer'?and his success has been repeated across a wide range of business situations and environments. He prides himself on being a coach and mentor to senior executives and Directors. In Board Director circles, Mr. Pfister has earned the nickname?'The Board Architect’...............<< read full bio?here ?>>

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Here's Some Additional Reading

Robustly Measuring the CEO

The Compliance Shepherd

The?Continuing?Manufacturer Uplift

The Global Director vs. the?Local?Director

The Valuation Expectation

Governance During Inflationary Periods

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