Corporate Governance Trends for H2 2024: Key Areas to Watch

The second half of 2024 is upon us. Here's a timely look at three emerging trends in corporate governance, aligned with our insights and conversations from our recent Asia Pacific Corporate Governance Summit held in partnership with The Legal 500.

Double Down on ESG Governance

Guard against greenwashing risk

Scrutiny of greenwashing isn't just a trend that will blow over. It is now firmly part of the narrative that companies must build with an authentic and transparent mindset. For private companies, it is important to understand reporting requirements, exemptions, specific risks, and opportunities on the ESG front and how these factors have a financial impact.

There are very real consequences to poor ESG governance. Beyond the environmental and social impacts, fines and penalties, operations are at risk as well. Companies need to cover their bases and show they are thinking deeply about supply chains and vendors. With reporting, and making ESG claims public, liability and visibility increase. ESG is one part of compliance and legal must be involved in this wider conversation on governance.

Information and Preparation is Power

Pay attention to nuances in reporting across jurisdictions

Regulatory nuances exist across different jurisdictions with Asia Pacific, and governance issues such as risk mitigation, as compared with litigation, could feature differently between developed markets and emerging markets.

Another lens to consider would be how reporting requirements shift when you've got shareholders in a public company, or when shareholders in such companies are also sitting board members.

Build a robust whistleblowing program

Ensure your employees are protected if they raise concerns and know about how they can raise concerns through the right channels. This allows for stronger internal governance.

Adopt AI wisely

Have a proper AI adoption strategy in place, including strong data literacy and an understanding of what data will be used, how it will be used, who will be using it, how it will be stored and how it will remain secure.

It is also key to have a plan to educate, inform and monitor employees' use of AI systems. Companies should consider; is a product built based on competitor sources; how is the use of AI sources regulated?

Have the Right Leadership and Influence

Directors play a crucial role in corporate governance

The Singapore Institute of Directors began an accreditation process in 2024, allowing directors to stay up to date in terms of governance issues of the day. This allows directors to more effectively contribute towards governance from a board level.

ESG governance needs legal oversight

Internal and external counsel both need to be keenly aware of the rising regulatory scrutiny and activity, particularly around greenwashing. Non-executive directors, too need to stay informed and educated in order to raise the right questions and challenge claims. This can help to reduce overstating claims and decrease the risk profile for businesses.

Let's Connect

When it comes to corporate governance, our deep understanding of jurisdictional and sectoral nuances can help you get ahead of the curve with risk mitigation. Across ESG, employment, M&A, AI, cybersecurity, data privacy and more, speak to our team of experts across Asia Pacific.

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