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  • Georgie Morell

Top Ten Governance Trends for 2023

It is not the usual themes of shareholder activism, cybersecurity, cryptocurrency, ESG and politics that will be keeping Boards grinding their teeth at night. Instead, a unique combination of ethical, economic, technological, regulatory, and public health concerns is what's poised to influence corporate leadership in unexpected ways, according to Forbes magazine.

Read the top ten trends every Executive and Director must be prepared for in 2023

1. New pressures between Board and management

This unique relationship is not always harmonious, clear, or transparent. Directors and Executives will be under increasing pressure to improve the proper balance of governance and management to support the business effectively. Clarity around the lines of authority and responsibilities will be critical to a successful collaboration. And a thriving brand.

2. Resetting the tone at the top

Board members and Executives can only escape the corporate guillotine when they demonstrate, through their consistent words and actions, that they are genuine cheerleaders for ethics and honesty to employees, consumers, suppliers, and investors.

3. Economic volatility

High inflation coupled with continued low job participation levels and the likelihood of a recession are strong headwinds to navigate. There is also geopolitical tension, the ongoing Covid pandemic and all its collateral damage, supply chain challenges and rising interest rates. This makes for a very complicated operating environment.

4. Informed risk taking

Corporate leaders will be expected to pursue innovative and bold business initiatives for growth and proactively shape corporate purpose and fortune. But this demands confronting risk and uncertainty with courage, insight, and hindsight. It also demands thoughtfully conceived and diligently developed initiatives.

5. Managing artificial intelligence risk

Ai is still very new to many. Yet its regulatory framework is quickly beginning to take shape and leaders need to understand it to manage it. Boards will need to rapidly come up the curve and develop internal structures and processes to provide effective board education, monitoring, risk prevention and compliance.

6. Misinformation and reputation management

Misinformation can very quickly destroy trust and confidence in a company and its leadership. Misinformation is therefore a serious enterprise risk and must be monitored at a strategic level. Good governance should address the definition of misinformation and its dissemination, and the privacy and free speech of employees relating to company policies.

7. Growth and anticompetition behaviours

The Australian government is very serious about maintaining and promoting competition to ensure we have well-regulated markets and consumers are protected. Mergers and acquisitions are facing increased scrutiny and challenged more frequently. Directors will face difficult issues when they pursue aggressive growth strategies.

8. Individual Accountability

Accountability starts at the top and Boards are responsible for setting the culture. Regulators have increased their scrutiny of corporate criminal conduct and the accountability of individual Executives. Compliance incentives and penalties will create tension within the management team and the Board. Business goals must not take priority over compliance and risk management goals. The consequences are often catastrophic.

9. Board Rejuvenation

Boards are on notice. Pressure is increasing for disciplined, independent strategic Board assessment and succession planning. Expectations are growing for meaningful Board turnover and composition, with heightened expectations around Board conduct and persistent calls for diversity of Board membership.

10. Public Health Volatility

Corporate Governance must confront our new reality that businesses remain vulnerable to public health challenges. Boards and management must be proactive in implementing a preparedness strategy and position around public health emergencies and rethink their workplace culture around illness.


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