BDO in the Boardroom

Join BDO's Center for Corporate Governance Amy Rojik as she discusses what may be in store for corporate tax reform under President Biden’s administration with Todd Simmens, one of BDO’s National Tax Partners.Key TakeawaysTalking points indicate President Biden is in favor of scaling back provisions put forth by the prior administrationKey corporate tax anticipated changes include:increasing the corporate tax rate from the current 21% up to 28%restoring the Alternative Minimum Tax to a rate of 15%increasing GILTI tax up to 21% (from current 10%-13%)The pandemic remains the priority, but we may expect to see procedurally certain tax provisions included within any additional stimulus legislation, akin to what was done with the enactment of the CARES ActTax reforms may be permanent or temporary: Reminder that some of the prior administration tax reforms were temporary and are set to expire in 2026Boards are encouraged to remain abreast of this area as part of their oversight of management’s corporate strategy, as tax considerations will undoubtedly have significant impacts in business decision-makingResources:BDO 2020 Tax Survey – stay tuned for the BDO 2021 Tax Survey - February 2021 releaseBDO Tax Resource Center

Join BDO's Center for Corporate Governance Amy Rojik as she discusses drivers of audit quality underlying high quality financial reporting that audit committees, management and users of financial statements can trust in with the leaders of BDO Assurance and Audit practices Christopher Tower and Phillip Austin.Key TakeawaysAudit committees are encouraged to understand how their auditors define audit quality and relevant audit quality indicators across a framework that considers people, process and technology to respond in real-time and achieve desired outcomesAudit committee engagement with auditors can be enhanced by:Asking for more time with auditorsTaking advantage of educational opportunities and timely insight guidanceEngaging in meaningful commentary on observations noted in the auditHaving proactive discussions around areas of significant audit focus, Critical Audit Matters and risk, including potential fraud or illegal actsUnderstanding how the auditor is engaged across the profession and with regulators and standard settersInquiring about the depth of support from centralized resources in the FirmRequesting candid observations about adequacy and quality of the accounting and finance functions within the clients’ organizationManagement and the audit committee can expect the future of audit will require:Auditors who are focused on greatest measurement and disclosure risks to the companyAuditors who are “current” and bring insights based on specialized expertise to bear based on your circumstancesPredictable audit work methods that aren’t disruptive of management operationsWe invite you to visit our current BDO Audit Quality Report – Continuing to Build Trust.

Join Terry Adamson as he chats with Robin Ferracone about the expanding role of compensation committees, including incorporating stakeholder measures into incentive plans, addressing diversity, equity, and inclusion (DEI), and adapting to the evolving workplace dynamics in 2021.

Join BDO's Center for Corporate Governance Amy Rojik as she discusses the challenges and considerations boards face in navigating a SEC 10A investigation with Seth Friedman, Partner with McDermott, Will & Emery and Christopher Tower, BDO’s National Assurance Managing Partner Audit Quality and Professional Practice.Key TakeawaysThe audit committee and the auditor have very clear, specific and time sensitive responsibilities when an illegal act is suspected.Company management and the audit committee should involve the auditor as early as possible when an illegal act is suspected.10A investigations tend to be incredibly dynamic, require iterative processes and often require independent experts to identify the full scope of the wrongdoing.Communications – timely and transparent – are necessary between the auditor and the audit committee and are expected by the SEC.Vigilance is strongly encouraged in the current environment where many organizations are experiencing rising economic and operational pressures and incentives to commit fraud are increasing.

To put a damper on hacker activities as we all continue to get comfortable in working remotely, some common sense advice from seasoned tech executive and public company board member Nora Denzel to help protect you, your colleagues and your company’s reputation when accessing and sharing sensitive information.Re-boot your routers regularlyQuestion which email you useTurn off listening and camera devicesAlways use a VPNChoose to use virtual or generic backgrounds for online meetings

Join BDO's Center for Corporate Governance Amy Rojik as she discusses why and how boards are turning their focus to the “S” in ESG with Nora Denzel, a seasoned Silicon Valley technology executive and dynamic public company board of director at AMD, Ericsson, NortonLifeLock and SUSE Linux.Key Takeaways“S” is not just about shareholders – it is about the health and well-being of all of your stakeholders: employees, suppliers, customers, and communities your serve“S” is in an “early” market phase – First step is to turn inward and perform “bottoms up” (e.g. pulse surveys, open door policies, view your health/benefits offerings) and “top down” (e.g., select the material issues to your company, particularly your talent pool)Select your framework in identifying relevant ESG issues to your company and perform a materiality analysis of the impact of these issues aligned your company strategyEnsure you are developing your ESG information via a stakeholder lens that has the same rigor, processes, inspection and metrics that other important corporate initiatives doCommunications – How and Who and WhenInternally – Determine how might dashboards need to change; how might committee charters need to change; understand tone at top, mood in middle and buzz at bottomExternally – Ensure your CSR plans have built-in continuum of accountabilityBoards have an opportunity to take a deeper dive into company data and identify trends and areas for improvement Focusing on the “S” can be a path not only to strengthen overall value creation but to also protect against reputational damageStart small and be cohesive: Tell a “single” story – integrate your reporting based on strategy and the identified critical success factors and how these are managed

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Trish Oelrich, seasoned independent board member, to discuss how boards are helping make corporate initiatives focused around diversity, equity & inclusion successful and how board self-assessments and refreshment efforts are further lending both support to DE&I and providing broader protections for the company. Key TakeawaysBoards need to be focused on diversity with specific actions of intentionality not only to create a diverse environment, but also to ensure diverse candidates are successful.Now is the time to audit the company and board’s diversity practices to ensure they will produce the results intended.Ensure the Board and company’s actions align with what you are reporting to the public, misalignment may result in derivative lawsuits against the board.

Join BDO's Center for Corporate Governance Amy Rojik as she discusses transformative impacts on corporate governance within the consumer products and retail industries with Anddria Clack-Rogers Varnado, Vice President, Head of Strategy & Business Development for Macy’s and Board of Director for Umpqua Bank (NASDAQ: UMPQ).Key TakeawaysTrends for retail and consumer products industries are currently focused on:Personalization of service – Getting beyond marketing saturation and offering an augmented reality/virtual styling that gets at “what is right for you (the customer) and how do I get it to you faster”Incorporating sustainability in end to end board discussions – e.g., From how sourcing products (e.g., from inventory waste in production to customer product disposal and “re-commerce” options)Ecommerce and data privacy concerns – personalization and targeting customer information leading to more frequent risk management conversations in the boardroomLeadership and talent development reflective of stakeholder groups - Does your board and management team adequately represent perspectives of your employees, your shareholders, your customers, etc.?Evolution of governance - Questions directors should be asking:Has the longevity or tenure of board members limited perspective/response in keeping up with trends in rapidly evolving industries?What new skills sets may be needed now that were not needed previously?How can the board agenda be re-shaped to determine relevance and frequency of discussion cadence?How can the board introduce/rotate voices in the board room to bring in new viewpoints?How can we learn from COVID-19 to ensure that management incorporates elements of scenario planning and broadening the “playbook” in strategic planning?Resources60-Second Retail - A BDO Podcast Series: https://www.bdo.com/insights/industries/retail-consumer-products/60-second-retail-podcast-series

Join BDO's Center for Corporate Governance Amy Rojik and Paula Hamric and Meghan Depp of BDO’s National SEC Practice office as they discuss the financial reporting and accounting considerations that audit committees and boards need to understand when contemplating special purpose acquisition company (SPAC) transactions.Key TakeawaysDon’t underestimate impact considerations – both on the front end in understanding accounting treatment and reporting obligations of the transactions but what may come next from a public company filing perspectiveUnderstand the process - Seek advice throughout the process as timelines can be very tight and there may be significant determinations, consultations and information that will need to be provided for the transaction to be approvedEnsure management has the ability to provide audited financial information that may be needed at each juncture of the transaction and post-transaction internal control documentation that will be expectedStructure the entity for success as public company - Accounting and reporting are just one aspectAdditional Resources:BDO Knows SPACs Series available on www.bdo.com and listed in the Podcast write up that covers:BDO Knows SPACs Part 1: Special Purpose Acquisition Companies as an Express Path to IPOBDO Knows SPACs Part 2: Accounting Considerations for SPAC SponsorsBDO Knows SPACs Part 3: Accounting Considerations for Target Companies of Special Purpose Acquisition CompaniesBDO’s Accounting & Reporting Advisory Services team lead by Mike Stevenson

Join BDO's Center for Corporate Governance Amy Rojik as she sits down with Lara Lee, Fortune 50 executive and now seasoned independent board member, to discuss how boards can reframe ESG by taking a strategic, holistic approach that moves beyond the obligations of disclosure and mitigation toward the opportunities of innovation and enhanced reputation. Lara is an expert in turning disruption, challenges, and emerging threats into sources of strategic repositioning and innovation.Key TakeawaysBest approaches to ESG are: strategic, holistic AND humanESG is not a check the box exercise but should be prioritized around elements that are both material (e.g., have significant business impact) and have strategic importanceESG is a lens to identify both risk and opportunity with a focus on long-term value creation and sustainable health of the business throughout the value chainDon’t let the tail wag the dog:ESG can be a catalyst for innovation and re-alignment of business strategyThe board needs to set the tone that it’s not simply about disclosure and risk mitigation but balanced with opportunityESG should not be an initiative in and of itself – it is a tool (not a strategy)Boards need to remain independently informed on the evolving ESG landscape