Posted by Fletcher Accounting and Tax Service Inc.

Corporate Governance in 2020: A Guide for all Global Trends Directors

Corporate Governance in 2020: A Guide for all Global Trends Directors

Many upper-level management teams are now taking into consideration the trends that are going to affect business in the coming year. They will be looking at how the actions of the trends will affect investor and stakeholder relations. Let’s have a look at some of the trends that might be in the spotlight for 2020.

Workplace Cultural Shifts

The Corporate Governance trends at the beginning of this year were analyzed by Forbes contributor Michael Peregrine, he took a slightly different approach. Instead of looking at specific trends that usually crop up, he took a higher-level approach towards trends.

He believed that one of the things that will become a major trend of 2019 was tacking the issue of gender inequality amongst boards. A study by Mckinsey carried this out in late 2018 about the role of women in the workplace and their huge lack of representation higher up on the career ladder and more particularly women of color.

There were also actions that were taken. Executive consultancy firm Spencer Stuart place 2,000 women on boards all around the globe in the first quarter of 2019.

These cultural shifts are seen to continue as we transition into 2020. The boards will have to adapt to workplace changes and be prepared for issues faced by women in the workplace as they begin to have better access to accelerating the career ladder. Stakeholders will also be pressured even more for an increase in representation on more boards.

Trends in the Digital Industry

As we head into 2020, the world of digital will take center stage in boardrooms. The forefront of R&D for many corporations no matter the industry can come from cryptocurrency to innovative technologies such as Artificial Intelligence and Machine Learning.

It is best for the Board of Directors to keep up with the latest technological advancements and have an in-depth understanding of the effect of these emerging technologies on their business. There will be an increase in efficiency if companies and boards embrace new tech and if used correctly, will cause their actions to be more transparent and accountable, which is welcomed by shareholders and investors.

Sustainability Expectations

The top of the agenda for many boards of directors will likely be sustainability, specifically environmental sustainability following Greta Thunberg’s speech at the UN Climate Summit.

The board will have to expect increased pressure from stakeholders, investors, and activities across the globe in 2020. They have to make decisions that are not only healthy for business for also for the planet.

In today’s generation, consumers have been more aware than ever about their buying decisions and are therefore making much more educated decision. When making major company decisions that could affect consumers’ purchasing habits, the boards of directors in all sectors must keep this in mind.

It is still important for investors to retain a certain level of corporate social responsibility other than turning a good profit. They won’t be able to make a profit for profit’s sake if the long term sustainability of the company is affected.

Changes in Politics

Trade deals may be affected all across the globe after yet another Brexit pushback and a General Election on the cards in the UK. You may want to watch out on how the board’s responsibilities will adapt because of that.

The US Presidential Election will also have a major impact on businesses. There is a high possibility for stakeholders and investors to see what kind of political activities and campaigns will be chosen by the board to support and spend money on.

A new Corporate Governance Code will be released by the Belgian Committee for Corporate Governance in Belgium known as the 2020 CG Code. This will apply to reported years that start after January 1, 2020. However, businesses can choose to adhere to the code for this year’s reporting as well.

It is without a doubt that companies will have their hands full watching out for these shifts in the business environment and dealing with their impact for the beginning of 2020. You may want to have a look at whether your board or co-directors are ready and fully equipped to respond adequately and address these trends.

Fletcher Accounting and Tax Service Inc.
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