29/10/2023
In the upcoming year, boards should anticipate their oversight and governance processes facing various challenges, including economic uncertainty, the ongoing conflict in Ukraine, difficulties in supply chain management, cybersecurity threats, potential regulatory and legal issues, and social concerns such as pay inequality and a competitive job market.
As the business and risk environment has drastically changed in the past year, with added factors such as geopolitical instability, inflation, and the possibility of a recession, companies are facing more complex and interconnected risks in 2024. This requires boards to have thorough risk management and oversight processes.
Stakeholders, including employees, regulators, and investors, emphasize transparency and disclosure, particularly regarding cybersecurity, climate change, and other environmental, social, and governance (ESG) risks. To address these challenges, boards should keep the following issues in mind as they plan and execute their 2023 agendas:
- Keep a close eye on how the management is addressing the risks and uncertainties caused by geopolitical and economic factors.
- Monitor the management's efforts to establish and maintain a resilient supply chain.
- Review the board's committee structure and responsibilities for risk oversight.
- Incorporate discussions on ESG (Environmental, Social, and Governance), including climate risk and DEI (Diversity, Equity, and Inclusion), into risk and strategy meetings and stay informed on regulatory developments.
- Determine when the CEO should publicly address social issues.
- Address NIS2, cybersecurity, data privacy, and AI as a comprehensive data governance issue.
- Make talent management, human capital management, and CEO succession planning a priority.
- Engage actively with shareholders, activists, and other stakeholders.
- Consider the strategic importance of talent, expertise, and diversity on the board.