With 2022 seeing a shift in focus to addressing the climate, energy and cost of living crises – all of which hit the most disadvantaged in society the hardest, 2023 will continue along similar paths. The key things for you to remember for good governance this year are about flexibility and risk management.
In 2023, instability will continue to be the new normal, and businesses will depend on their Boards for support. Effective communication will be key in business strategy.
Here at Convene we are committed to assisting good governance, so we have listed corporate governance trends for 2023 to keep you in the know.
These trends, and many others, will affect how Boards do business in 2023. Being prepared to navigate these challenges and opportunities will set your Board up for success in the New Year and beyond.
1. Risk Management
Given the current economic climate, as well as the cost of living crisis, boards should be aware of the possible risks of inflation and rising interest rates, as well as fluctuating operating costs for the company.
Boards should consider establishing audit committees and other subcommittees in order to keep a close eye on economic trends, as well as enabling them to make smart decisions and avoid risks.
Enterprise risk management will enable Boards to be more flexible in 2023, readying them for the challenges of the year ahead.
2. “Tone at the top” mentality
In 2023, it will be crucial for board members to be aware of any disparity between what’s happening at the top vs what it’s like in the middle. It’s at this middle, employee level where the true corporate culture lives.
Create a corporate culture that prioritises ethical standards, professionalism, integrity, and compliance. This culture should reflect and support the corporation's purpose.
3. Climate disclosures and ESG
In 2023, boards will need to continue to prioritise the business value of ESG, while being aware of its risks. Consumers are beginning to understand the negative impacts that industry can have on the planet, and they’re holding companies responsible for being good corporate citizens.
Although there are no current UK laws surrounding ESG disclosures and reporting, it will soon become a necessary measure in developing better sustainability and governance practices. Some sectors in the UK, including the Housing Sector have already begun their own initiatives to try to start the ball rolling with ESG Reporting Standards emerging such as the SRS.
Boards should stay on top of any new developments into mandatory ESG disclosures by ensuring they are prepared to to showcase their ESG policies, practices, and performance, and to communicate their goals to different stakeholders, for both the good of the company and of the planet.
4. Independent Directors
A new trend in 2023 will be more independent directors, who will bring new perspectives and new ideas to the Board.
Independent Board Members are more impartial because they don’t have the close ties to the company that the executive and investor Board Members do. Modern governance depends on this neutrality so corporate Boards can be sure they’re making decisions that are supporting the company’s short- and long-term objectives.
5. Focus on Board Diversity
The pressure is on companies and corporate Boardrooms to create diverse, supportive, and inclusive environments. In addition to the bottom-line benefits of having diversity in Boardrooms, Boards are improving diversity, inclusion and accessibility because it’s the right thing to do.
Diverse Boards include members of different cultural and economic backgrounds, as well as multigenerational members. Many boards have opted to hire DE&I leaders to help them navigate any potential biases and other challenges that come with the desire to increase Boardroom diversity.
6. Increase in Transparency and Accountability
While this links to both an increased focus in Board diversity and ESG, it is an important aspect of governance to remember going into 2023.
Boards should commit to being transparent to the public, to their customers, investors, employees, suppliers, lenders, and shareholders. They should hold themselves and the individuals within the organisation accountable for the actions of the company.
7. Board Evaluations and Self-Assessments
Ensuring your Board is operating as effectively as possible will be even more crucial in 2023, and so it is vital that organisations conduct Board evaluations and assessments of the Board’s performance periodically. The increased demands being put on boards in 2023 make regular board performance evaluations a necessity.
Corporations should regularly assess individual directors, board, and committees, then address changes that might need to be made.
Also, think if extra committees should be formed to oversee key risk areas, such as cybersecurity, to show proper risk management.
8. Cyber Security
Boardroom security will certainly continue to be a priority for Boards, and this links itself to the general theme of risk management in 2023.
By their nature, Boards of directors have access to a company’s most sensitive information, from trade secrets to customer information. It is crucial that this information is kept safe and protected.
Many rely on Board management software to provide an additional layer of protection. Boardroom technology and cybersecurity in the boardroom is imperative, and secure Board portal software can be a massive help.
How Can Convene Help With Your Governance In 2023?
Our comprehensive features, ensured to prepare you for the challenges of 2023, include:
- A Document Library, with role-based access to ensure your sensitive documents are protected.
- A built-in Audit Trail, so you can be sure you are compliant with all regulations.Integrated Video Conferencing, so you can make the switch from remote to hybrid working seamlessly, whilst still viewing your Board Pack all on one screen.
- Surveys, with the option for anonymity, so you can be sure you are aware of your employees' opinions.
- Action Items, so you can follow up on any tasks automatically.
- Accessibility Features, including text-to-voice, which makes us the leading accessible Board Portal.
- Fully GDPR-compliant security, including AES 256-bit encryption and ISO 27001 accreditation.
Our software now also comes as an integration with Microsoft Teams, which provides the benefits of both Teams and a Board Portal.
Convene ESG is designed to improve your sustainability reporting. Designed in collaboration with our clients, Convene makes reporting simple, so you can focus on developing sustainable strategies.
Our aim is to alleviate some of the challenges of data gathering, key performance tracking, and reporting, so organisations can move towards net zero. They are able to organise their report, track progress, assign sections, automate reminders and see best practice. The solution will create a Word document ready to publish or edit as necessary!
Convene ESG also has a built-in comparison feature, which allows you to compare against competitors' formatting of their publicly accessible reports! This will help your whole sector develop the best results possible.