Boards can expect their oversight and corporate governance processes to be put to the test by an array of challenges in the year ahead – including global economic volatility, the war in Ukraine, the energy crisis, supply chain disruptions, cybersecurity risks, ransomware attacks, regulatory and enforcement risks, and social risks, including pay equity and the tight talent market.
The business and risk environment has changed dramatically over the past year, with greater geopolitical instability, surging inflation, rising energy prices, and the prospect of a global recession added to the mix of macroeconomic risks companies face in 2023. The increasing complexity and fusion of risks unfolding simultaneously, and the increased interconnectedness of these risks up the ante for boards to have holistic risk management and oversight processes.
In this volatile operating environment, demands from employees, regulators, investors, and other stakeholders for greater disclosure and transparency – particularly around cybersecurity, climate, and other environmental, social, and governance (ESG) risks – will continue to intensify.
Drawing on insights from our global Board Leadership Center network and interactions with directors and business leaders, we highlight eight issues to keep in mind as boards 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.
- Keep ESG, including climate risk, embedded in risk and strategy discussions and monitor regulatory developments.
- Approach cybersecurity, data privacy, and artificial intelligence (AI) as holistically as data governance.
- Make talent and CEO succession a priority.
- Engage proactively with shareholders, activists, and other stakeholders.
- Think strategically about talent, expertise, and diversity in the boardroom.
- Reassess the board’s committee structure and risk oversight responsibilities.
About the Board Leadership Center
KPMG’s Board Leadership Center (BLC) offers non-executive and executive board members – and those working closely with them – a place within a community of board-level peers. Through an array of insights, perspectives and events – including topical seminars and more technical Board Academy sessions – the BLC promotes continuous education around the critical issues driving board agendas.
