The unprecedented events of the past three years have clearly tested boards. The need for action on ESG performance, including climate risk, increasing cybersecurity risks (including ransomware attacks), business and supply chain challenges, a new way of working, the rapidly changing regulatory landscape, and other factors impacting the global risk environment will continue to challenge boards at the top of their game.
In short, boards are at a pivotal time. The need for today's boards to help their companies reimagine, rethink, and reorient themselves is likely a once-in-a-generation opportunity. We have listed some of the topics that boards should focus on.
Board agenda 2023
Drawing on insights from KPMG’s latest survey work and interactions with Board members and business leaders, we have crystallized the following eight burning topics for boards to keep in mind as they consider and carry out their 2023 agendas.
- Maintain focus on how management is addressing geopolitical and economic risk
- Monitor management’s progress in building and maintaining supply chain resilience
- Reassess the board’s committee structure and risk oversight responsibilities
- Keep ESG, including climate risk and diversity, embedded in risk and strategy discussions
- Clarify when the CEO should speak out on social issues
- Approach cybersecurity, data privacy, and artificial intelligence (AI) holistically as data governance
- Make talent, human capital management, and CEO succession a priority
- Engage proactively with shareholders, activists, and other stakeholders
- Think strategically about talent, expertise, and diversity in the boardroom
To learn more about these topics, download our guide to what's on the 2023 board agenda.
Sustainability
Innovation and technology
Digital disruption is changing the world in which we live and work. New technologies have created new markets that, in turn, create new competitors. To be ready for the future, board members should address the risks and opportunities arising for their companies at an early stage.
We take a business-first approach to advise you on digitalization, innovation and transformation. From data science and machine learning to agile software development on cloud platforms – our international team has an exceptional overview of innovative and emerging technologies.
Discover our center of excellence for data-driven technology.
Or find out more in our recent thought leadership publications:
Cyber security and technology risk
The increasing dependence on technology for core business processes (IT-supported transformation) makes the confidentiality, integrity and availability of information indispensable. This results in the need for effective and risk-based information security planning.
Does your company conduct risk assessments, thanks to which technological threats and vulnerabilities are identified? Do you perform penetration tests and vulnerability scans to help identify key vulnerabilities and risks? Do you implement security solutions to mitigate key technology risks, such as those related to access control/management?
Cyber Resilience −The role of the board (PDF, in German)
The cyber threat results in operational risks that can jeopardize the continued existence of the company. Board members and management must be familiar with these risks.
Crisis prevention and readiness
External interest in board activities is on the rise as board members are more and more held to account as the ultimate protectors of corporate value. While regulators and investors are increasingly seeking greater transparency and accountability, the most senior board members, led by the chair, should be taking the initiative in setting the agenda and the tone of the board.
We have tapped into the experiences and insights of seasoned non-executives on what it takes to lead an effective board.
The increasing likelihood of externally triggered crises occurring – cyberattack, natural disaster, terrorist act, supply chain failure or spread of disease such as COVID-19 – should be prompting a hard look at crisis readiness and response plans.
Diversity and inclusion
Why is inclusion and diversity so important?
Research shows that companies with greater diversity in gender, culture, sexual orientation and ethnicity are more likely to see above-average profits and be more successful. Diverse teams better represent the spectrum of different views and benefit from a broader range of perspectives and skills. Diversity feeds an environment in which creative problem solving, emotional intelligence and overall performance thrive. It also enables a different approach to risk-taking.
In the pursuit of different views, boards should seek to achieve diversity in the widest sense. Beyond gender and racial diversity, diversity in skills, thinking, experience, and background is critical. Generational perspectives and ethnic diversity enrich the corporate dialogue, especially at global companies.
But this is only true if the corporate culture supports honest, open communication and embraces different points of view. Without these enablers, decisions will not fully benefit from diversity of thought.
Diversity is a mindset, not a one-off task. Board composition should evolve to reflect the changing business and societal environment and enable the board in its tasks and duties.
Culture
Company leaders are shifting their attitudes in favor of strengthening corporate culture and placing more emphasis on ethics among their strategic priorities. Corporate culture is a set of beliefs and attitudes about the way things are done in a company. It is the fundament for the values to which everyone adheres. So, it plays a vital role when it comes to compliance, employee retention and top talent attraction.
Alignment of strategy and leadership is key for a strong culture which, among other things, fosters community and increases employee engagement.
What are boards doing to build ethical culture and how do companies establish the values that drive good ethical behavior?
We have interview two experts on this strategic topic. Download the interview to find out more.
