2014 Hot Topics - Board of Directors

Deloitte's issued a "Hot Topics" Bulletin earlier in the year which can be found on its governance website addressing the 2014 Boardroom Agenda.  It is interesting to review this document today, with the passage of time, to see how it stacks up with actual events that have occured on the governance front over the past 12 months.

The first key area identified in the report was the role of the board and means to improve board effectiveness. Deloittes emphasized the key attributes of its corporate governance framework, including talent, integrity and compliance (amoungst others), all supported by a strong governance infrastructure.  Looking back on the year,  perhaps the need for a robust and talented board is best exemplified by the Co-operative Bank event from the spring of 2014.  Key governance shortfalls have been identified at Co-op in terms of over-reliance on the executive team and the lack of challenge to a certain leadership role which, in hindsight, was probably lacking judgement and perhaps integrity.  For more on this, see the Leadership Foundation for its views on the Co-op Bank situation at http://www.lfhe.ac.uk/en/governance-new/resource-bank/previous-news-alerts/governance-at-the-coop.cfm.  

Deloittes also ranked risk oversight as a key 2014 boardroom agenda issue.  Risk oversight has now been elevated in the boardroom, notably in the financial sector, with the 2014 Basel pronouncements about the importance of such activities.  Further, my friends on boards are now indiciating that firmwide "risk assessment' statements are the rage and linking this over-arching risk statements back to key business decisions, including acquisitions, business line expansion plans and control processes are soon likely to become commonplace on bank boardrooms. 

One of the remaining prominent sections of the Deloitte's bulletin is entitled Board composition and leadership structure/CEO succession planning.   This past year has witnessed an significant number of CEO resignations, raising again the need for thoughtful CEO succession planning:  BG Group Plc, Mozilla, Target, Reddit, Seaworld, American Realty Capital, Ecobank, Sotheby's, Thomas Cook, Mulberry have all experienced CEO departures and the need for CEO succession planning.

What changes to the corporate governance landscape will 2015 bring? 

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