Paralegal, US Corporate Secretarial and Board Support, Intertrust Group
Environmental, social and governance (ESG) criteria, technology and risk management were top of the agenda for law firms, corporations and service providers at a recent corporate governance conference in Chicago
How do you balance business success with the competing demands of meeting ESG standards, being compliant and keeping up to date with technology?
That was the trio of challenges that corporations, law firms, service providers and customers were debating at the 75th National Society for Corporate Governance Conference, held in Chicago from 20-24 June.
Top of the agenda was ESG and how it’s becoming increasingly important for companies to gather and disseminate data, as well as change the culture around sustainability.
Another key topic was technology and how it can enhance performance and processes for clients, customers, stakeholders and employees.
Risk management was also an important talking point. Companies need to think carefully about compliance, cybersecurity and appoint committees with the right stakeholders to ensure the data is secure.
ESG comes to the forefront of good corporate governance
A key trend of the conference was the rapid acceleration in the need for ESG to be integrated into the fabric of all corporations.
In practice, this means companies being able to collect and gather data to provide material information on significant sustainability-related risks and opportunities necessary to assess enterprise value. Your ESG strategy should be clear and made available to key stakeholders, shareholders, employees and clients – not to mention the regulators.
It also means thinking about how you incorporate ESG practices into your strategy and processes, and how that fits with the mission of the company.
- Environment – how are we making an impact? What are we doing to make an impact on the environment? Are we energy efficient?
- Social/community/culture – have we supported local charities? How are we creating an organisation that is diverse across all categories? Are we being responsible by managing risks and opportunities related to diversity, equity and inclusion? Have we hired the right talent?
- Governance – do we have the right stakeholders in place to manage compliance and risks? Do we have a diverse board?
Technology is rapidly changing and is vital to good corporate governance
To remain competitive, companies will need to invest heavily in technology or outsource it to a third-party service provider.
Clients are searching for the right technology to support their subsidiary management profiles. And more times than not, the solution is to use a service provider to manage the life cycle of their entity profiles.
The right entity/litigation/financial tool would provide a global view of all subsidiaries while managing the myriad corporate actions, contracts, litigation, capital structure, financial reporting, etc.
In this way, they have a single, well-managed portal that will ensure they don’t miss important deadlines, and manage the entire global profile to ensure the entities remain compliant and up to date with regulations in different countries.
Ideally, clients will have real-time access to a portal and see all events affecting their entities. These may include annual reports filing, tax filing, a contract that is about to expire or a business licence that might need renewing.
Essentially, they want an easy and intuitive entity-management portal that can give them a 360-degree view of all their holdings.
Another key aspect of technology is centered around the electronic board portal/virtual boardroom, which plays a very important role in corporate governance.
Effectively, it manages and tracks all board-associated packs and agendas, including D&O questionnaires, resolutions and minutes. And it is able to track and manage all board actions, items, comments, and signatures etc.
The right corporate governance approach for risk management
Cyberattacks have increased over the past two years. Malware and ransomware are proliferating, which is why cybersecurity is an area in which specialist skills are needed to handle risks for global corporations.
The board should oversee cybersecurity by appointing a committee with key stakeholders to manage any risk-related items. A Chief Risk Officer and a Chief Information Security Officer should manage key risks while educating both management and team members.
Global organisations need to think about having a secured network, using a virtual private network and Wi-Fi-password-protected system to safeguard valuable data and business information.
Managers and executive boards should also consider the role that blockchain and cryptocurrency will play in the future.
We have seen how cryptocurrencies and exchanges have been recently affected by volatility. There are some serious questions that still need to be answered around trust and regulation.
On the other hand, more and more corporations and companies want to add cryptocurrency to their balance sheet – but this is a huge risk, due to the increase in cyberattacks.
Corporate secretaries, general counsels, outside counsel and other corporate governance professionals are all wrestling with these questions right now. This is something which we will need to work through in the months and years ahead.
ESG, technology and risk management are the key corporate governance challenges that corporations face. With the right strategies and support, these can be managed and planned for.
Why Intertrust Group?
- Intertrust Group is a publicly listed company with more than 70 years’ experience in providing world-class trust and corporate services to clients around the world.
- Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment. We help companies to expand globally, offering support with restructuring, outsourcing and further developments.
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