2018 Governance Outlook: Projections on Emerging Board Matters

Executive Summary

Key Projections

Board Priorities

NACD

• Industry change, business model disruption, and changing economic conditions are among the top trends corporate directors expect to impact their companies in 2018.
• In light of major turbulence in the business environment, a majority of corporate directors indicate that it is critical to strengthen the board’s role in strategy and risk oversight.

Business Risks

Grant Thorton LLP

• Risk management at many organizations needs an overhaul to be effective in an increasingly complex and volatile environment. Current enterprise risk management (ERM) approaches often struggle because they are too procedural and compliance driven.
• Boards should actively encourage more predictive risk management through scenario planning and use of advanced analytics. 
• Directors must determine what level of foresight is needed to fulfill their responsibility to protect and grow value. “How do we avoid becoming the next Encyclopedia Britannica or Blockbuster?” is the oft-asked question.

Board Evolution

Spencer Stuart

• Boards are enhancing disclosures about board composition, including director backgrounds, ages, tenures, and independence, among other attributes. These disclosures are generally accompanied by a description of the board nominating process.
• Boards are considering a wider variety of profiles for new director candidates by adding first-time public company directors, active executives below the C-suite, and women and minorities.

Litigation

Katten Muchin Rosenman LLP

• Most securities lawsuits have targeted alleged omission of information, as opposed to financial misstatements. 
• Directors should consider gathering more information from senior executives and comparing disclosure practices with peer companies that may be disclosing more information.