Category: Governance News

Boards must decide whether to address ESG elements as standalone agenda topics or incorporate those elements into regular agenda topics. Example: Board oversight of ESG elements in the company’s supply chain can be incorporated into supply chain reporting and planning – human rights protections at the company’s suppliers, worker and product safety, sustainable sourcing, environmentally-responsible manufacturing (e.g., water, energy, waste). This integrated approach is holistic and holds business leaders, not just corporate staff, responsible for ESG outcomes.

How can boards communicate their oversight to investors?

• Companies can talk with investors about the board or committee discussions of particular ESG issues “x” times per year and which executives join those discussions.
• In-depth disclosure on the company’s website and in the proxy statement of the board’s approach to ESG helps all investors gain an understanding of the board’s role in oversight of ESG issues and take comfort that the board is addressing ESG issues in a proactive manner.

Experience at WeWork suggests that it missed a few preparatory steps before its IPO – an important one being getting its corporate governance in order.

During 2019, about 159 IPOs were priced at $50 million or more in the US (compared to 192 in 2018). Whether they listed on NYSE or Nasdaq, these companies needed to adhere to minimum listing standards. In addition, they had to comply with SEC and other standards. Even complying with those standards did not keep all those newly public companies from going off the governance rails.

Setting up the mechanics, the processes, and the culture to be a successful public company requires planning as well as alignment on values and policies. Experienced governance professionals can advise and help company leaders build these out.

Experienced governance professionals can help in other ways. Helping to determine the checks and balances needed to mitigate risk and promote desired behaviors. Building a diverse board. Building an annual board and committee calendar that ensures the board identifies and addresses all required and relevant agenda topics. Ensuring that meeting agenda focus on the things that must be addressed and those that will matter over the long-term. Fostering candid board discussion and effective board decision-making.

Do not overlook how technology can help the IPO preparation, transition to public company compliance and long-term success. Foresight® is an enormous aid to the law firm or in-house personnel putting in place the mechanics. It provides the framework and the governance confidence needed to get the organization and the board ready for the IPO. And it will help prepare and keep the newly public company on track with governance.

I was very honored to be recognized at Corporate Secretary magazine’s 2019 Corporate Governance Awards dinner with a Lifetime Achievement Award. This post attempts to capture a few thoughts from my impromptu acceptance speech and add one or two more.

Corporate governance is very much a team sport. No one does it well alone.

A corporate secretary is reliant on colleagues within and well beyond the Legal Department. Partnering with Compensation can mean a better outcome on Say on Pay, with Finance can make for a smoother, less costly bond issuance, with External Reporting can produce a clearer, more concise 10-K, with Investor Relations can build an investor engagement program that generates meaningful communication.

Beyond the confines of the company, a corporate secretary needs and benefits from the expertise of investors, outside counsel and service providers of all sorts (among them transfer agents, proxy solicitors, strategic advisors, software vendors (who provide tools to automate board planning, compliance, board postings and subsidiary records). Building effective partnerships with these individuals and their organizations increase one’s efficiency and impact – and improve outcomes for your company.

Membership in the Society for Corporate Governance is another reliable way to build a network of experts on whom you can call for help (Yes, there is such a thing as a Corporate Governance Emergency!) and with whom you can share in return. (Look into the Society’s new Certified Corporate Governance Professional designation!)

Because corporate governance is a team sport, coaching is involved. So many people helped me! I am eternally grateful to them all. I have tried to pay it forward and urge others to do so as well – and one need not wait until one is senior in an organization to do so. At any level of your company, create opportunities to spread the word about corporate governance. Speak at brown bag sessions for development programs. Invite members of rotational development programs onto the corporate secretary’s team for a year or two. They will learn about the board, stock compensation, investor engagement, and securities laws – all good things to know as they rise through the ranks and manage others. Create a one-hour “Public Company Boot Camp” that covers board basics, fundamentals of disclosure (“materiality,” 8-Ks, GAAP/Non-GAAP, Reg. FD, insider trading and company policies. Hold “Boot Camp” whenever an executive is elevated to Executive Officer/Section 16 Officer status and at a quarterly Legal (this is good stuff for the commercial lawyers to know!), Finance or Compensation Town Hall. Whenever and whoever will have you. Offer to be a mentor – and weave corporate governance into your discussions.

Share learnings (not confidential information) beyond your company, with others in the corporate governance space. We improve together. Find early career professionals outside your company to mentor and coach. See an interesting article, share it. Sharing can also take more formal forms. Be a panelist at a local or regional or national conference – or at a service provider event.

With your time and funds, support organizations devoted to furthering research and education (at all levels – from undergrads to professionals to directors) regarding longstanding and evolving corporate governance topics.

While I am grateful to have received this amazing award, I am not done just yet. My latest “pay it forward” initiative is Foresight — the first end-to-end corporate governance software solution. Foresight does for agenda planning and meeting management what portals did for board mailings. It provides a framework to simplify board planning and governance compliance, generate draft minutes, and analytics to improve board effectiveness and decision-making. Moving from 80,000 plus employees to a tech start-up has been an education but also an opportunity I am grateful to have and share.

Corporate governance is a team sport. Play well. Play nicely. Pay it forward.