When we talk about ethics, what do we mean? And how does it differ – or relate – to compliance? Often we’re simply talking about good decision making when we talk about ethics. It’s hard to come up with a business decision that doesn’t involve deciding what would be a morally good path forward and…

Despite progress in the last few years, changing existing board demographics will likely take years at current rates. Here’s what your board needs to think about. The recognition for greater diversity and equity on boards has come from direct pressure on three main fronts: regulatory quotas, listing exchanges and institutional investors – see my February…

Talk of ESG seems to be everywhere but are boards saying “enough”?  According to Morningstar, ESG or sustainable funds grew to almost 400 in 2020, up 30% from 2019. But, as we come close to the end of 2021, ESG seems to be dropping from the board agenda according to a recent survey by Diligent.…

Activists focus on certain board of director vulnerabilities and target those companies who have them. And while the pandemic brought a number of environmental and social issues to a head, there are certain red flags – mostly relating to a board’s composition – that attract shareholder activists. Because the board has an obligation to address…

There’s no doubt that proxy voting is a time-consuming and often challenging process. Proxy advisory firms saw a need to serve a new market by helping institutional investors navigate the vast amounts of proxy votes on a myriad of issues. Now, that market is both large and powerful. It’s dominated by Institutional Shareholder Services (part…

Board refreshment continues to be hotly debated. But discussions about what it means, and how boards do it, vary considerably. Governance experts generally agree it involves the potential for complacency and a lack of director independence. As noted by Institutional Shareholder Services, “While shareholders, directors, and other market constituents vary as to the reasons for…

Sometimes it’s difficult to talk about our values and immediately change the behaviors of ourselves or others because, typically, our inner thoughts and emotions present us with a rather sophisticated set of rationalizations for either acting or not. There are a number of ways others can push back on your ideas – common rationalizations –…

There is a great deal of board-level discretion in executive pay, but at the same time, it is highly scrutinized in the media and among proxy advisory firms, regulators and shareholders alike. Publicly traded companies are required to have a “comp” committee which, at a minimum, sets the pay and benefits for corporate executives, most…

The recognition of the importance of gender diversity on boards has come a long way over the past decade – but most especially in the past few years. This recognition has come from direct pressure on three main fronts. 1) Quotas: Over the last 10 years, some 10 countries have instituted gender quota requirements for…

Defining Materiality Materiality matters – it is the cornerstone of financial, and increasingly non-financial, reporting – because it helps determine the importance of an information item for a variety of users. The global capital markets move on information that public companies have about their financing, investing or operating activities. Responsibility for the disclosure of material…