As imminent adversities unfold around the world, boards present to the market what should guide the main discussions at meetings. Economic volatility, the Russia-Ukraine war and a focus on ESG (good environmental, social and governance practices) are some of the eight priority topics that will be discussed by the boards.
The 8 main issues to be addressed by the boards and which will have their attention focused on risk containment are:
1. Economic volatility
Greater geopolitical instability and rising inflation are among the macroeconomic factors that corporations must consider. In addition to the impacts of the pandemic, the evolution of the conflict in Ukraine could accelerate the weakening of the global economy. Companies and board members must consider the impact on prices, the cost of human capital, and meeting consumer needs.
2. Russia vs Ukraine conflict
The consequences of the war affect companies according to their sector of activity and the geographic scope of their activities. Challenges related to this situation must be monitored by boards according to the intensity of the impacts on business.
3. Supply chain disruption
With disruptions to global supply chains caused by COVID-19 and expanded by the war in Eastern Europe, many companies are reassessing their strategies. Updating a risk scenario, with vulnerabilities and opportunities, should be a constant topic for discussion among leaders, as well as developing plans to increase the resilience and sustainability of the supply flow.
4. New rules for ESG-related corporate disclosure
In line with international trends, the Brazilian Securities and Exchange Commission (CVM) is adapting standards for corporate disclosures related to environmental, social and governance factors. CVM Resolution 87 introduced new requirements for Brazilian publicly-held companies regarding the communication of ESG-related issues, such as climate risks and diversity.
5. Responsibility in monitoring emerging risks
With the increase in complexity and the number of adversities to which companies are exposed, many boards receive support from committees and specialists to ensure effective management and greater care with market risks.
6. Corporate positioning on critical issues
Given the rise of investor and stakeholder activism, boards should reassess their role in overseeing CEOs and leadership on controversial issues. A company’s public stance or silence on high-profile issues, such as climate change and equity, should be monitored by the board.
7. New work dynamics
Understanding the employee-employer dynamic and new employment relationships is a critical challenge for companies and must be addressed in the strategic agenda.
8. Robust focus on ESG
Other topics under the ESG umbrella, such as energy transition and social issues, are gaining prominence on investors' agendas and are on the radar of advisors.
Source: Valor Econômico