Directors Quarterly: July 2024
GenAI, climate-related disclosures, financial reporting updates, proxy season takeaways, an asset owner view on engagement, and more.
Board oversight under pressure
Ongoing wars abroad, political division and election year uncertainty in the United States, along with continuing state, federal, and global regulatory discord on sustainability and artificial intelligence, among other issues, are just some of the factors shaping the business landscape in the months ahead. While board directors have had a crash course in operating under pressure in recent years, asking tough questions, particularly regarding management’s scenario planning and preparedness, remains critical—and challenging.
The acceleration of generative artificial intelligence is putting a sharp focus on effective board oversight. In this edition of Directors Quarterly, we offer areas for boards to probe with management as they try to separate the hype from reality and navigate unfolding regulatory developments.
Even with the stay of the Securities and Exchange Commission’s (SEC) final climate-related disclosure rules, pressure from investors, stakeholders, and other regulators continues to drive momentum on disclosure. Companies may be subject to disclosure under state laws (with California leading the way), as well as international laws and standards, including the European Union Corporate Sustainability Reporting Directive. We highlight areas of focus for boards and audit committees as companies determine how best to structure their compliance and disclosure programs for new disclosure requirements.
Our financial reporting and auditing update highlights recent developments on sustainability reporting and disclosure regulations, along with developments from the Public Company Accounting Oversight Board and SEC.
We also explore voting trends and outcomes from the recent proxy season, which saw an increase in shareholder proposals and in requests for no-action relief. Finally, our Q&A with Yumi Narita, executive director of Corporate Governance at the New York City Office of the Comptroller, provides insights into how the New York City pension funds evaluate proxies, engage with directors, and establish their positions.