The Conference Board Governance Center Blog

Aug
16
2017

Board Oversight of Long-Term Value Creation and Preservation

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Download the current issue of Director Notes, entitled “Board Oversight of Long-Term Value Creation and Preservation: What needs to change?”

Enterprise risk management (ERM) stemmed from the laws and regulations of the last decade, with their focus on protecting the public and preserving shareholder value. It is rooted in a cautious approach of value preservation that, according to some critics, may lead the firm to miss long-term value creation opportunities. However, today’s large shareholders controlling trillions of dollars in investment assets are increasingly calling on CEOs to focus on such long-term value creation.

The report discusses whether boards receive from senior management the reliable information they need to meet these expectations. Could the existing approaches to ERM and internal audit be ill-equipped to promptly elevate to the board critical information on long-term strategy threats and prospects? If so, what can business organization do to fill the gap and develop a more objective-centric ERM?

 

 

Aug
07
2017

The recent ransomware attacks are a call to action for boards

By Steven Grossman

It has been a busy few months.  The WannaCry ransomware attack made big news in May, raising a lot of antennas.  Everybody waited for more shoes to drop from the leaked NSA hacking tools ransomware imageand indeed more attacks came. The Petya ransomware variant (AKA “NotPetya”) caused significant damage to global companies.  These attacks are the next level in a series of events over the past year that need to be a call to action for corporate directors charged with overseeing the health of their companies.

If board directors and executives were not taking notice before, they certainly are now.  However, attention is not enough. The need for real cyber security expertise on the board is critical in managing the risk of cyber-attacks that threaten the viability of companies across the globe.  The Cybersecurity Disclosure Act of 2017, a bill introduced in the United States Senate in March 2017, hopes to drive transparency in the existence of that expertise on the boards of publicly traded companies. (watch my interview  on this topic with The Conference Board Governance Center’s Senior Fellow Bob Zukis). Read the rest of this entry »

Aug
02
2017

Activist Insight: The Conference Board proxy advisor report ‘a little harsh’

“Just What Is the Corporate Director’s Job?” That is a question The Conference Board’s Governance Center is in the midst of posing to different groups of stakeholders over the next two years.2017-08-02_1450

Led by Executive Director Doug Chia, the Center has begun hosting roundtables with these stakeholders. So far, it has met with proxy advisors, directors, and investors. It will continue such meetings over the next two years with six more stakeholder groups: hedge funds, academia, the Delaware bar, the media, corporate secretaries, and regulators, among others. According to Gary Larkin, report author and research associate with The Conference Board, “Over time, the range of expectations for doing the corporate director job well has widened, and the job has become a prism. How it’s defined shifts depending on the perspective of the observer.”

On June 20, The Conference Board released the first of its series of reports based on those meetings: Just What is the Corporate Director’s Job? Proxy Advisors’ Perspectives on the Board Member’s Job Description.

While there has been some coverage in the corporate governance press (See Proxy Advisors Seeking More Than ‘Male, Stale, and Pale’ Directors, Directors & Boards), The Conference Board’s report has provoked critical discussion from corporate governance thought leaders as well. Read the rest of this entry »

Jul
19
2017

The latest corporate governance research from The Conference Board

succession2 Over the past three weeks, The Conference Board has released three corporate governance-related reports. They focus on such issues as CEO succession, board refreshment, gender diversity, and tenure as well as corporate political contribution disclosure. These come on the heels of The Conference Board Governance Center’s release of Just What Is the Corporate Director’s Job? Proxy Advisors’ Perspectives on the Board Member’s Job Description. The reports, which are available to members of The Conference Board, are: Read the rest of this entry »

Jun
13
2017

In search of effective board assessment programs

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By John Morrow

Most major U.S. public companies have an annual assessment process. For many, the process is pretty basic and routine with a checklist that never changes. It has become a necessary evil – a mindless process – that directors know they have to live through every year. For some, it doesn’t mean anything. It’s just a compliance process.

Unfortunately, boards that look at assessment in this way are doing themselves and their shareholders a big disservice. Directors need to be committed to the process, and not just along for the ride. A board can draw a lot of value from a robust board assessment, and assessment could be an early warning to problems that may be festering. Read the rest of this entry »