This week we highlight a report by BDO’s Center for Corporate Governance and Financial Reporting on a variety of topics that corporate management and boards of directors should be prepared to address in connection with their 2018 annual meetings. The main issues include the impact of efforts by the current administration regarding taxes and deregulation, as well as corporate accountability and compliance concerns.
This week, we highlight a report by EY Center for Board Matters on the top five priorities for companies in 2018 based on outreach conversations with institutional investors. Investors offer that their top five priorities this year are:
- Board composition, with a particular focus on enhanced diversity
- Board-level expertise that is more aligned with business goals
- Increased attention to climate risk and the environment
- Enhanced attention to talent and human capital management
- Compensation that is more aligned with performance and strategy
Click here to view the full report.
One of the primary functions of a board of directors is to enhance shareholder value. Advocates argue and studies show that companies with greater board diversity outperform those companies with less diversity. This is one of the reasons that board composition (and, in particular, gender, race and ethnic diversity) is a topic of increasing focus among corporate governance groups, investors, and regulators in both the U.S. and Europe.
This week we highlight a publication by Equilar titled, Declassified Boards Are Much More Likely to Be Diverse. The Equilar Gender Diversity Index (GDI) has reported that, at the current pace of growth in female representation on public company boards of directors, gender parity would not be reached until Q4 2055 for the Russell 3000. However, annually elected boards may already have an edge against their classified counterparts.
This week we highlight two analyses, one by J.P. Morgan and the other by Ernst & Young, reviewing the 2017 proxy season. The reports address board diversity; gender equality; environmental, social and governance (ESG) issues; and the normalization of shareholder activism as high priorities and key trends for many investors and boards.
This week we highlight a report by Ernst & Young based on three years of research on the linkages between nonfinancial performance and investor decision-making. The data concludes that with regards to environmental, social and governance (ESG) reporting, there is a global trend toward increased interest in nonfinancial information on the part of investment professionals.
This week we highlight a report on Board Refreshment Trends at S&P 1500 Firms based on a survey conducted by Institutional Shareholder Services and the Investor Responsibility Research Center Institute. The analysis examines demographic trends in the boardroom, including tenure, age, gender and ethnicity/race and offers evidence of the impact of the three most common refreshment tools (retirement ages, term limits and boardroom evaluations) on refreshment.
When Snap, Inc., parent company to the popular social media app, Snapchat, completed its much-anticipated IPO last week, investors were quick to question whether the company was overvalued. Despite half a billion dollars in losses last year, the stock closed its first day of trading at an eye-watering $28 billion valuation. By close of trading the following Monday, the stock had fallen to below its opening price. But other market watchers were distracted by a sense of déjà vu as yet another lauded tech company went public with overwhelmingly white and male corporate leadership.