On November 1, Glass Lewis released its 2020 Policy Guideline updates for the Canadian market. These changes are expected to be effective for shareholder meetings taking place beginning on or after January 1, 2020. They have identified several updates in the areas of compensation and governance as follows:
Idea. Check. Funding. Check. Business Plan. Check. Board of Directors? The beginning of any journey, especially in business, starts with an idea. Once that idea has been cultivated and a plan is in place, then comes funding, the board of directors, employees, office space, etc. It’s a misconception to leave the creation of the board of directors as one of the last to-do items. Whether you’re a big or small organization it helps to be proactive when it comes to forming the group of individuals who help to manage the activities of your business (i.e. your board). This board can be elected or appointed, and they are tasked with maximizing overall organizational value, while simultaneously protecting the interests of any key stakeholders.
In 2017, a Deloitte study found that “high-performing S&P 500 companies were more likely (31 percent) to have a tech-savvy board director than other companies (17 percent).” Khalid Kark, Tonie Leatherberry and Debbie McCormack, Deloitte LLP, Technology and the Boardroom: A CIO’s Guide to Engaging the Board
I have a daughter, and as the father of a young girl, I naturally worry about her future. How I might protect her; help her develop skills; and prepare her for a successful and fulfilling career? When I think about these things, I worry about what she might endure along her journey and how can I protect her from negative experiences like bullying and harassment? The reality is that, unless the two of us are employed in the same company or she is sitting on the same Boards that I sit on, I will rarely be able to protect her once she is an adult in the professional world.
It is 2016 and Wells Fargo had just “survived” one of the biggest scandals of the decade. The creation of millions of fraudulent checking and saving accounts in the names of clients who had not given their consent. This event resulted in the loss of hundreds of millions of dollars and over 5,000 employees. A hit like this is not easily resolved or swept under the rug. But how? How did this company, one of the biggest banks in the world, dig itself into such a deep, expensive hole?
Human Capital Management or “HCM” is becoming an integral part of an organization’s stated priorities as they seek to successfully utilize their people to attain individual as well as organizational goals. In order to achieve this objective, organizations must view their employees as assets with value that need to be retained, as opposed to resources that can be exploited. HCM involves hiring, managing, training and retaining talented and high performing employees. While this has always been challenging, the adoption of technology has proven to be beneficial and essential in streamlining this process. Companies such as Workday and Ultimate Software have created software systems that Human Resources professionals have started to leverage more and more to manage their HCM challenges, below the executive level, in this ever-evolving environment. However, there is still a disconnect and lack of attention when it comes to leveraging technology to manage Executive level human capital.
There’s a slight spring in your step as you saunter to the door after a grueling, but productive 3.5-hour AGM. For the time being, your reality is a harmonious world in which your company’s board of directors and shareholders are in sync and the mystic rivers of communication are flowing openly. This world is built upon a foundation of trust - trust that shareholders’ give to their board of directors, because they hope that the board is doing what they can to protect their financial interests. Despite a universal standard of trust, every once in a while, a breach may cause a shareholder (or two) to go rogue. Rogue, activist shareholders may attempt to use their influence to bring change for or within the company.
Most of you should be (figuratively or literally) familiar with Murphy’s Law: “Anything that can go wrong, will go wrong,” and throughout history, this saying has been validated time and time again. Therefore, if you ever wonder if or when corporate governance should be considered important, the simple answer should be “ALWAYS.”