'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ? ? ?Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ? ? (i) Nasdaq report on 5 areas of board governance: Nasdaq?recently released its "2024 Global Governance Pulse" report , based on the "results from a survey conducted this July that gathered data from over 870 board members, executives, and governance professionals across organizations and industries globally", with the "goal of providing data and insights on corporate governance matters to help boards assess and improve their quality of governance and overall effectiveness across five key areas":?

? ? ? ? ? ? ? ? ? ? ? ? — Board composition and culture?

? ? ? ? ? ? ? ? ? ? ? ? — Board evaluations?

? ? ? ? ? ? ? ? ? ? ? ? — CEO evaluations and management oversight?

? ? ? ? ? ? ? ? ? ? ? ? — Governance practices, processes, and tools, and?

? ? ? ? ? ? ? ? ? ? ? ? — Strategic and risk topics on the horizon

? ? ? ? ? ? ? ? ? ?Below are the report's "Key Takeaways" in two of these areas:

? ? ? ? ? ? ? ? ? ?"Board Evaluations:?Sophisticated board members understand that a well-designed and executed board evaluation process provides an understanding of the correlation between a highly effective board and an organization’s successful performance for the benefit of its stakeholders. To foster board excellence and a performance-oriented culture, consider the following actions:

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Assess the quality of the board’s organizational oversight and how effectively board members execute their governance responsibilities.

? ? ? ? ? ? ? ? ? ? ? ? ? -- Establish an annual board and committee evaluation process to gather candid feedback and form the basis for action plans.

? ? ? ? ? ? ? ? ? ? ? ? ?— Conduct board member peer assessments to support development and inform renomination decisions.

? ? ? ? ? ? ? ? ? ? ? ? ?— Determine if external board evaluation support is needed for meaningful and candid engagement.

? ? ? ? ? ? ? ? ? ? ? ? ? -- Determine a cadence and process for gathering feedback from management on the board’s effectiveness and governance practices.

? ? ? ? ? ? ? ? ? ? ? ? — Establish a plan for tracking progress toward specific, documented opportunities that improve board effectiveness and?the value derived from the governance framework and practices.

? ? ? ? ? ? ? ? ? ? ?"Governance practices, processes, and tools: Innovation in the boardroom can dictate how it is adopted and valued within the organization. To help maintain alignment between the governance, leadership, and business models:

? ? ? ? ? ? ? ? ? ? ? ? ? ? — Determine the best blend of in-person meetings and virtual meetings to support quality board engagement and alignment in decision- making and oversight, as well as to promote efficiencies and cost savings.

? ? ? ? ? ? ? ? ? ? ? ? ? ? — Evaluate whether separate committee meetings with an option for non-committee members to observe promotes more universal knowledge across board members, efficiency for management presenters, time for full board discussions in meetings, and agility in decision-making.

? ? ? ? ? ? ? ? ? ? ? ? ? ? — Regularly assess how dynamic, concise, well-organized, and informative board materials are and whether they support informed board decision-making.

? ? ? ? ? ? ? ? ? ? ? ? ? ? — Provide opportunities for board members to continually build knowledge though site visits and group and individual education sessions with an allocated budget and defined goals or require."

? ? ? ? ? ? ? (ii) PwC on the board's need for enhanced reporting from management: In October, PwC?posted on its website this report, "Corporate Board of Directors: Latest Findings from Pulse Survey ", discussing the findings of?PwC's "October 2024 Pulse Survey " Of particular interest, note the final section of the report, "Boards continue to beat the drum: Better and enhanced reporting, please." Below are excerpts:

? ? ? ? ? ? ? ? ? ?"Geopolitical conflicts, leading technologies and emerging risks. A key way directors stay informed is through the reports they get from management. To effectively oversee strategy and risks, they need consistent and insightful reporting.....We asked directors about the quality of the information they receive from management on 11 key topics. The results show a clear demand for more detailed reporting, including areas from sustainability and geopolitical uncertainty to the labor market and more. The biggest gap in what they want and what they’re getting is around deals strategy.?Boards need transparency on management’s deals choices and alternatives so they can help provide objectivity on a business unit’s value.

? ? ? ? ? ? ? ? ? ?"What you can do:

? ? ? ? ? ? ? ? ? ? ? ? ?--?Insist on enhanced reporting.?Challenge management to provide holistic and tailored reports on strategy and risks that can help inform boardroom discussions.

? ? ? ? ? ? ? ? ? ? ? ? ?-- Think?holistically about operations and performance.?Request more thorough reporting that includes not only strategic initiatives and financial implications, but also tangible examples of successes and failures across the enterprise. For example, ask for case studies of recent projects, detailing what worked and lessons learned.

? ? ? ? ? ? ? ? ? ? ? ? ?-- Be vigilant about upskilling on evolving topics.?Ask questions to learn more about evolving, complex topics and look for opportunities to attend specialized training sessions to gain a better understanding of topics impacting the company and the industry.

? ? ? ? ? ? ? ? ? ? ? ? ?-- Get more involved in portfolio strategy reviews. Make sure management is conducting thorough portfolio reviews on a regular basis and provide regular feedback during the process. This participation can help bring objectivity in assessing your company’s portfolio against the core strategy and keep the process moving."

? ? ? ? ? ? ? (iii) IESE Business School survey on boards of directors and how they can improve their effectiveness: This June, the IESE Business School?published this report, "How can boards improve their effectiveness? 2024 IESE survey on boards of directors ", being a "comprehensive survey of board directors on how they see these four critical areas.... :?corporate purpose and culture; board competencies and dynamics; CEO leadership development and succession plans; and the board in corporate strategy and geopolitics. The report consists of a section on each of these four areas, and ends with 13 "conclusions and reflections that may help improve boards’ effectiveness". Below are several of these conclusions and reflections:

? ? ? ? ? ? ? ? ? ? ?"-- A?vast majority of board directors say that their companies have a formal, written corporate purpose statement. Only around 25% of the directors say that their firm’s purpose has been approved by shareholders.

? ? ? ? ? ? ? ? ? ? ? -- Corporate purpose statements are highly focused on people and customers.?This is consistent with the notion that purpose should be connected with customers’ needs and has the potential to engage employees more deeply.

? ? ? ? ? ? ? ? ? ? ? -- Corporate purpose seems to have a positive influence on defining the firm’s goals,?corporate strategy, business model, customer service, and people management. Most board directors agree that purpose is well integrated into corporate strategy and major corporate policies.

? ? ? ? ? ? ? ? ? ? ? -- Trust, transparency, a collaborative environment, and meritocracy are the most important features determining the firm’s culture. Corporate culture is a very strong factor?that drives people hiring and development, including selection of the chairperson and the CEO.

? ? ? ? ? ? ? ? ? ? ? -- Board directors consider leadership, strategy team collaboration, and the ability to drive change the most important board members competencies.

? ? ? ? ? ? ? ? ? ? ? --?Board members also consider board directors’ personal skills as critical for board effectiveness.?Integrity, reliability, critical thinking, being a good team player, and independence are considered the most important ones. The importance given by board directors to directors’ professional competencies and soft skills is significant.?This reflects that board directors consider board members’ competencies decisive for board effectiveness and that board structural characteristics as defined by most regulators and asset managers are insufficient and should take board dynamics and the human dimensions of board decision-making into account.

? ? ? ? ? ? ? ? ? ? ? -- The board as an effective team is considered very important by board directors. The critical dimensions of teams as assessed by board directors are the following:?directors are collectively responsible for decisions and have clear goals and understanding of board issues, quality of board discussions, and the role of the chairperson in leading the board. Board directors also point out that board collaboration is very relevant, although there seems to be a little inconsistency, as this?factor does not have directors’ overwhelming support.....

? ? ? ? ? ? ? ? ? ? ? ?-- There is wide agreement on CEO leadership competencies. An overwhelming majority of board directors agree that the critical capabilities for CEOs are people motivation and engagement, execution and delivery, the capability to make accurate diagnoses and define goals and strategies, and effective communication. Very high scores for both hard skills (such as strategy and execution) and soft skills (such as people motivation and engagement) suggest that board directors look at both types of competencies.

? ? ? ? ? ? ? ? ? ? ? ? — Board directors believe that leadership development should not be left to a random process but rather monitored and led by the board.?In particular, the design and implementation of an internal leadership development program, regular interaction of the board with the senior management team to discuss specific issues, and performance assessments are considered top initiatives through which the board can be engaged in leadership development.....

? ? ? ? ? ? ? ? ? ? ? ? — Even if board members consider strategy a top job of the board, only 55% of companies explicitly consider strategy in their board meetings at least once every quarter. A rather surprising outcome is that devoting attention to customer data and service does not seem to be a priority in this sample. Only 59.7% of directors report that their company reviews customer data regularly.?This may be inconsistent with having a well-defined strategy since customer analysis is critical in defining and executing an effective strategy.

? ? ? ? ? ? ? ? ? ? ? ?-- The level of collaboration on strategy between the board and the CEO seems to be perceived as very high by board directors, which is critical to the board performing well—not only advising but also debating with the CEO and eventually approving and supporting the firm’s strategy."

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