Article Summary
A series of corporate governance controversies at leading global companies has highlighted the need for better governance, triggering tensions between boards and investors. With 70% of recent activist investor demands focusing on governance reform, adopting best practices can help rebuild trust between stakeholders. Key areas for improvement include regulatory compliance, board accountability, communication, cybersecurity, executive compensation, ESG integration, and diversity.
What This Means for You
- Stay informed about emerging industry regulations and ensure your organization’s compliance.
- Insist on board and management accountability through well-defined roles, responsibilities, and expert inclusion.
- Encourage modern and transparent communication with shareholders through digital platforms, facilitating early feedback and reducing conflicts.
- Stress the importance of strong cybersecurity measures and data protection to maintain stakeholder trust.
- Advocate for clear communication and justification of executive compensation based on competitiveness and long-term benefits.
- Support ESG policy implementation, setting company-wide targets, and ensuring compliance, while emphasizing the positive fiduciary impact.
- Promote formalized board diversity initiatives, setting targets, and assigning subcommittees for inclusivity.
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Key Terms
- Corporate governance, regulation, compliance, cybersecurity, executive compensation, ESG policy, board diversity
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