BDO in the Boardroom

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Vanessa Teitelbaum, Senior Director of Professional Practice at the Center for Audit Quality (CAQ), to discuss the critical role audit committees play in the integrity of capital markets and how transparent disclosures about their oversight practices can provide significant value in the protection of investors.Key TakeawaysRobust proxy disclosures represent an opportunity for the audit committee to make clear to investors how the audit committee conducts its oversight responsibilities to promote audit qualityMost significant noted proxy disclosure increases in 2021 relate to the audit committee’s oversight of cybersecurityExpanded audit committee disclosure may present a mitigating safeguard to investor concerns of a lack of objectivity by the audit committeeAudit committees may find value in benchmarking from the Barometer, along with other CAQ resources, to provide practical data to help inform judgment on their own oversight and resulting disclosuresAudit committees are reminded to pay close attention to the SEC Regulatory Flexibility Agenda and proposed rule-making/comment letter processResourcesAccess the CAQ’s 2021 Audit Committee Transparency Barometer here.

Join BDO Tax Partner and Tax Risk Services National Leader Michael Williams as he sits down with James Egert, BDO in the U.K. partner and leader of its Tax Assurance and Risk Management practice, to discuss managing tax risk and why this topic is increasingly appearing on board agendas. James’ perspective from the more legislatively regulated U.K. helps inform what makes managing tax risk important for U.S-based companies. Key Takeaways:Board members and stakeholders are focused on tax risk in all forms: operational, compliance and strategic.If the wider operations of the business are not aligned with those of the tax function, there is greater possibility of riskBoard members should be aware of the top tax risks in business, including e-commerce, cross-border issues, residency issues, and information and data sharing.To help avoid reputational hazards, any large business should have a clearly articulated tax strategy approved by the board.

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Patrick Gadson, Partner –Shareholder Activism and Mergers and Acquisitions at Vinson & Elkins, to discuss defense strategies for boards and management teams to consider when challenged by activist shareholders. Key Takeaways:Boards of companies (all sizes) that are underperforming need to truly understand BOTH economic weaknesses in addition to other elements for improvement (e.g., ESG) that activists can use to promote their agendaTo engage effectively with activists truly requires boards active in knowing and developing relationships with their shareholder baseWhen put into an activist situation, directors need to understand the thick skin of and ability to go the distance in lengthy contests that activists possess that can often lead to “activism fatigue” in the boardroom that may affect good decision-making of directorsAvoid the emotion and strategically scenario plan with an objective party who can truly survey relevant facts and circumstances through an unbiased lens

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Cathy Moy, BDO Chief People Officer, to discuss company culture as a business imperative and the reasoning why culture must be center stage for boards as companies reposition their businesses and focus on growth in 2021 and beyond. From Cathy’s unique vantage point, she has seen firsthand how a company’s investment in its people positively impacts its bottom line – and long-term sustainability. Key Takeaways:Today, corporate culture is no longer a nice-to-have – it is a key driver of business and competitive advantage that must be top-of-mind for boards and the C-suite. Culture has to be foundational, drive from the top, for an organization to achieve the type of success that comes with employees who are fully bought into the company purpose and vision.Companies that approach key drivers of culture – from reimagining how work is accomplished to advancing DEI to investing in talent development and retention – have been, and will continue to be, the most resilient in the face of challenging times. Don’t discount the importance of culture when considering M&A – if you don’t have culture synergy and common vision for the future, the likelihood of successful integration decreases significantly. As part of the board’s role in mitigating risk and providing strategic oversight of management, it must consider the implications that corporate culture has on organizational agility and ability to sustainably scale. Recommended Resource:NACD Blue Ribbon Commission on Culture as a Corporate Asset

Melissa Means from Pearl Meyer discusses the impact of ESG on compensation committees, including incorporating HCM and DEI metrics. Key questions for incentive plan design revolve around measuring, timing, and incentive weighting. Companies are at varying stages of ESG integration, with a focus on defining HCM for organizational purposes.

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Sarah Feingold, Co-Founder of The Fourth Floor to discuss corporate governance considerations in the start-up world and what has driven her passion for helping connect diverse individuals to the boardroom.Key Takeaways:Never too early for good governance: Can be the “rocket fuel” for a company’s trajectoryA diverse board is a powerful board and skillset needs continue to evolve in the boardroom to help companies build, broaden their network and scale the businessBoards are NOT one-size fits all: As a prospective board member, “aim your arrow” – align your own subject matter expertise and experience with a network and a focus on specific companies that will benefit from your knowledge and add to your personal growthValue: Start-up opportunities can be incredible learning opportunities, may lead to equity, expanded networking, and a path to additional board/career roles

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Demetrios Frangiskatos, Assurance Northeast Regional Managing Partner, to discuss the frenzy of SPAC and resulting De-SPAC transactions and in particular, considerations that board members should be thinking about if thinking of or selected to be affiliated with the acquirors or acquirees.Key Takeaways:Good governance at the board level enacted at the outset of the SPAC transaction process is becoming an important differentiatorSpeed of an operating company becoming a public filer accelerates the need for public company experience in both the management team and the boardIntegration of the target company requires directors to have a strong understanding of technology, financial and operating systems, internal controls, regulatory filing requirements, accounting and financing complexities, and overall fiduciary governance responsibilitiesCritical to have a solid understanding of current deal terms, regardless of what side of the transaction you may be

Join Amy Rojik, director of BDO’s Center for Governance as she shares some timely considerations for directors to consider with respect to board composition refreshment strategies.Key TakeawaysBoard composition, succession and refreshment planning should be treated as a priority and normal part of oversight responsibilitiesRefreshment is underscored by having board members recognize that board appointments are not life tenancies and a director’s usefulness should be viewed from the stakeholder lens…ALWAYSA good strategy provides for regular and intentional use of skills matrices that align board composition with both current and future strategic needs of the business and allows for periodic adjustments as the business evolvesClear expectations should be outlined for directors about tenure, capacity, and participationA refreshment strategy should include a longer-term, multi-year view that anticipates departures, leadership changes, illness, and tragedies that can strike and hit companies unawareDirector candidates should be continually considered through the lens of prioritized skills and attributes that allows for the development of a sustainable talent pipeline for future

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Yelena Barychev, Corporate Governance and Securities Compliance attorney, to discuss the proliferation of voluntary disclosures being produced by public companies, the increasing attention by regulators and considerations for how boards are to respond in the best interests of their stakeholders.Key TakeawaysVoluntary disclosures generally fall into two buckets: (1) suggested directional principles-based disclosure – e.g. from the SEC; and (2) company and broadening stakeholder expectation-driven voluntary disclosure – e.g. investors, proxy advisory voting policies, rating agencies, consumers, employees, lenders, etc.Disclosures of 10-K narratives within MD&A and proxy statements are beginning to reflect more expansive voluntary disclosures inclusive of direct messaging on societal issues from the company and its leaders.Voluntary disclosure may be viewed as an opportunity to share where the company may be headed strategically but need to be mindful of once something is disclosed, there is an expectation for consistency in continuing to provide information going forward – good or bad…Controls and procedures are extremely important considerations for the board and its committees, particularly when considering providing non-prescriptive disclosures or in non-traditional areas where reporting practices continue to evolve.

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Karen Schuler, BDO Principal and Leader within our Governance Risk and Compliance group, to discuss how boards’ oversight of data governance within their organizations is changing to meet the opportunities and risk in the rapidly evolving digital space in which organizations are conducting their business.Key TakeawaysBoards need to understand how their organization balances the value data provides with the risk assumed to protect itCompliance with data regulations at the local, state, federal and global levels are increasing in complexityData governance is finding its way into the “ESG lens” as companies expand their disclosure landscape to address broadening demands of stakeholdersDigital shifts towards a single environment or “data fabric” connecting via a cloud-based platform helps organizations manage their business and maximize value of dataBoard members are challenged to ensure their organizations are making appropriate investments in digitization while managing rapidly evolving cyber threatsDirectors who thoughtfully embrace disruption within corporate strategy while placing equal value on enterprise risk management in safeguarding digital assets will be able to demonstrate due care in their oversight responsibilities.