2022 board priorities - Critical questions for US boards to consider EY Center for Board Matters
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EY Center for Board Matters 2022 board priorities Critical questions for US boards to consider
2022 board priorities Critical questions for US boards to consider We believe that better questions lead to better answers and a better working world. Likewise, we believe that a board’s most effective tool is asking compelling questions. These questions can lead to better governance and organizations that drive value for all stakeholders. Heading into 2022, we’ve compiled a list of relevant and timely questions for the board to consider in the following areas: Strategy and innovation Risk and resiliency Strategy that positions companies to innovate Risk management that enables resiliency and differentiate for a sustainable future amid new and evolving challenges Talent oversight Dynamic governance Broader oversight of culture and talent that is Dynamic governance that addresses expanded prepared for the transforming labor market and changing oversight requirements
Introduction
Companies continue to refresh their strategy to strengthen agility, resiliency and sustainability
and leverage innovative opportunities that can accelerate their performance over the long term.
Trajectories of companies that are thriving and leaning into this strategic reset are diverging rapidly
from those that are merely surviving.
Technological advances continue to transform operating This environment calls for enhanced scenario analyses
models and ways of working and living, reshaping and contingency planning across multiple extreme
stakeholder expectations, requiring companies to accelerate scenarios, with a deeper recognition of the external and
their digital ambitions and expand worker flexibility to systemic risks that threaten financial and operational
create a competitive advantage. As a result, companies resiliency. As a result, organizations are reinventing their
are upskilling and reskilling their workforces and putting risk management models and processes using technology
people and culture at the core of value creation. to enable more timely internal insights across an array
of strategic and operational issues further corroborated
Climate change and biodiversity loss are threatening through third-party external sources of information.
the ecosystems on which our economy and humanity
depend, calling for a reevaluation of how strategy Boards have both the opportunity and the responsibility
and risk management mitigate and adapt to these to help guide companies in this new era. They can support
challenges. With climate risks approaching points their companies in incorporating human and natural capital
beyond which it may be impossible to recover, many as part of business decisions and strategy, and harness
stakeholders believe it is urgent to act at pace and scale risks as opportunities for innovation and a competitive
to achieve a low-carbon, nature-positive, sustainable advantage. However, this can’t be achieved through a
future. With trust in government waning, businesses historical governance model. Boards should continue their
may have an opportunity to lead on these issues. own transformation to a new agile and dynamic form of
governance and continuously challenge their composition,
The global supply chain, in its current form, is incapable committee structure, agendas, and ways of working to
of withstanding the disruptive forces of tomorrow. position their organizations to thrive in the long term.
Fast-changing consumer preferences, environmental
disruptions and intrinsic changes to the global order
“
are key drivers of change. As companies advance
technologically and work moves to anywhere, the
landscape for cybersecurity threats widens with malware,
ransomware and other new sophisticated attacks
continuing to cripple companies’ critical infrastructure. Boards have both the opportunity
And as countries decouple globally through the continued
rise of nationalism and populism, geopolitical risks and
and the responsibility to help guide
opportunities are routinely challenging organizations. companies in this new era.
EY Center for Board Matters 2022 board priorities 03
Questions to consider
Theme 1
Strategy and innovation
Strategy that positions companies to innovate
and differentiate for a sustainable future
Strategy and innovation
Q Q
How is the company Are material environmental, social
rethinking its definition of and governance (ESG) issues
“long term” to maximize
value while also focusing 90% considered in the company’s
long‑term strategic planning? How
do the company’s business model,
on near‑term risks and
opportunities? Is the practices, products, and services
strategy appropriately of CEOs agree that long‑term address urgent environmental
focused not only on where value creation across stakeholders and social challenges as we move
the company is going, will be rewarded by the market. toward a more inclusive and
but where it can go? EY survey of 305 CEOs sustainable future?
Q
What data and metrics are being
used to assess the health and
vibrancy of the organization’s
“An open exchange of ideas is essential to
challenging how we think and work —
culture and its alignment which in turn sparks innovation.
with strategy? Is the culture
Encouraging diversity of thought is key.
appropriate to inspire and
enable innovation? Jeff Wong
EY Global Chief Innovation Officer
Q
Is the company’s What are the primary barriers to your company’s optimal allocation of capital? Select up to three.
capital allocation
Lack of access to data 52%
aligned with the
necessities of Lack of monitoring performance 46%
its long-term Lack of data analysis capabilities 42%
strategy? How
is the company
Ineffective model of decision-making frameworks 40%
addressing Inability to accurately prioritize projects 40%
barriers toward Ineffective execution of projects 35%
optimal allocation?
Lack of organizational agility 30%
Process is too rigid 8%
Internal politics and biases 7%
EY survey of 1,050 CFOs
EY Center for Board Matters 2022 board priorities 05
Strategy and innovation
Q Q
Does the board have the appropriate
Has management appropriately
governance process to oversee
considered partnerships, joint
strategic investments that seed
ventures and alliances, along
innovation to change the game?
with M&A, to accelerate the
How is it supporting the acceleration
strategy, particularly with
of idea generation, trialing and
longer-term adjacent and
assessment while also encouraging
transformational opportunities?
appropriate risk‑taking?
Q
Are newer and innovative
We asked CEOs to identify the top three trends
technologies, including digital impacting their industry.
platforms and cryptocurrency
solutions, appropriately leveraged of CEOs across all
to accelerate goals and objectives? companies say that
How can these technologies
accelerate the speed to market
63% accelerating technology
and digital innovation
is a top trend impacting
and enhance virtual collaboration their industry.
and customer engagement?
EY survey of 305 CEOs
Q
What is the company’s transition plan for thriving in a net-zero
future? Is that plan integrated with the company strategy?
Does it include specific short-, medium- and long-term
greenhouse gas reduction targets and related decarbonization
initiatives? How is the company preparing for additional
climate‑related disclosure requirements?
of CEOs agree that societal and
97% environmental changes have a critical impact
on their companies. Many are making plans
to become carbon neutral by 2050.
EY survey of 305 CEOs
EY Center for Board Matters 2022 board priorities 06
Strategy and innovation
Q Q
How is the company investing Does the board understand the company’s supply chain
in protecting and restoring constraints? Is the board confident that the supply network is
the natural ecosystems and flexible and agile amid continued global supply chain challenges?
biodiversity on which its How is it addressing increased calls from stakeholders for
business relies? sustainability and less waste?
Approximately one-third of CEOs indicated the supply
70%
chain as an area where they expect to make the most
changes in the next three years, and 70% of those
CEOs say they are considering sustainability and
circular economy in their supply chain decision-making.
EY survey of 305 CEOs
Source materials
• Is your capital allocation strategy a long-term plan or a short-term fix?
• The CEO Imperative: How has adversity become a springboard to growth?
• Can your people adapt as quickly as your strategy?
• Think like your stakeholders to build long-term value
EY Center for Board Matters 2022 board priorities 07
Questions to consider
Theme 2
Risk and resiliency
Risk management that enables resiliency
amid new and evolving challenges
Risk and resiliency
Q Q
Do scenario analyses consider
Are contingency
24%
an appropriate range of
and response plans
extreme and even improbable
related to material
scenarios, including existential
and high‑impact risks,
threats? Do they incorporate
such as cybersecurity
the potential compounding
of board members say their organization’s risk breaches and
effects of various risks, such
management is not at all effective in managing natural disasters,
as supply chain disruption, atypical and emerging risks, which might
periodically simulated
talent acquisition and retention, include threats associated with new technology
or the impact of the climate emergency. and reviewed with
inflation, future interest rates
the board?
and an evolving tax landscape? EY survey of 500 board members
Q
How is the company revisiting and adapting its risk management strategy and management’s
approach to the three lines model in response to potential changes in the external and internal
environment, changes in the strategy and risk landscape, and the company’s operating model?
of board members do not believe their organizations have a
84% highly effective risk management strategy, and 55% of board
members identified that risk management often struggles to keep
pace with changes in the business strategy.
EY survey of 500 board members
Q
Has the board considered
how the organization’s risk
assessment capabilities
“
The most important thing you can be today is agile.
The right mix of scenario planning and collective
are evolving, including intelligence allows you to prioritize opportunities,
how analytics, artificial
create revival plans and make up-to-the-minute
intelligence and other emerging
technologies can be used to decisions about everything from supply chain to
review and validate data and workforce mobilization. Adding AI into the process
information to unearth insights makes it even more effective.
into enterprise risks and
Lance Mortlock
opportunities? Managing Partner, Energy | Ernst & Young LLP (Canada)
EY Center for Board Matters 2022 board priorities 09
Risk and resiliency
Q Q
How has the company’s cybersecurity risk management What types of data is the
program evolved to address the current environment in which organization collecting from its
attackers are targeting a larger surface area and using customers and other stakeholders
increasingly unpredictable tactics? How are cybersecurity to better assess the trust, risks
and data privacy considerations proactively integrated into and opportunities related to
all major strategy or tactical decisions, such as transactions, changing preferences and needs?
alliances, new products or services, and technology upgrades? How is the collection occurring?
Q Q
How is the
company scanning
and assessing
geopolitical
What is the company
doing to address
material social risks
across its value
“If the organization commits to
reducing its carbon footprint,
developments, chain, including abiding by global modern slavery
including a rapidly the treatment of acts, or improving diversity and
changing trade and employees and veteran inclusiveness, it is imperative
regulatory landscape suppliers’ human
and governments rights practices and
for its third-party ecosystem to be
moving to a more impacts on customers aligned with these principles.
interventionist and the communities Justin Boehm
policy position? in which it operates? Consulting, Senior Manager | Ernst & Young LLP
Q
How is the company assessing the impact of physical and transition climate risks on products and services,
supply chains and operations that can materially affect operating costs and revenues across the enterprise?
“
Because climate-related risks are inherently more complex and long-term than
most traditional business risks, scenario analysis is essential for organizations
to understand the physical, economic and regulatory connection between future
climate impacts and business and supply chain activities.
Mathew Nelson
EY Global Climate Change and Sustainability Services Leader
EY Center for Board Matters 2022 board priorities 10Risk and resiliency
Q Q
Does the board understand and approve the company’s data privacy
and data usage policy? How is customer and employee data use
managed? Are social surveillance algorithms reviewed for bias?
Is data protection considered beyond cybersecurity protection?
Has the organization’s tax
planning strategy been Deliver the certainty customers crave
reevaluated to address What is most important when choosing to share your personal data
with organizations?
potential tax policy changes,
as well as impacts arising from Secure collection and storage
potential shifts in the supply 63%
chain and capitalization? Has Control over what data is being shared
the organization considered
57%
growing stakeholder
Trust in the company collecting the data
interest in tax transparency
and potential related 51%
reputational impacts? EY survey of 1,910 consumers
Source materials
• EY Global Board Risk Survey
• How to manage ESG risk across your third-party ecosystem
• Has lockdown made consumers more open to privacy?
EY Center for Board Matters 2022 board priorities 11Questions to consider
Theme 3
Talent oversight
Broader oversight of culture and talent that is
prepared for the transforming labor marketTalent oversight
Q
Directors stay current on human capital and talent trends primarily
As the nature of work and employment
through management briefings; yet, nearly half say the CHRO
further transforms, how will the (or equivalent) does not regularly report on human capital to the board.
organization adapt its talent functions
to realize its strategy? Does the board
28%
spend the same amount of time with the Does your CHRO (or No
chief human resources officer (CHRO) equivalent) frequently
report on culture and 55 %
discussing data and metrics to assess the Yes
health and welfare of the workforce as it
talent-related metrics 17%
to the full board? Only through
does with the CFO reviewing and assessing management
reports,
the overall financial health and stability? EY survey of 378 board members
not in person
Q Q
To attract and retain talent How have the desired skills and behaviors for the organization’s
in a hypercompetitive labor leaders evolved in response to the events of the last two years,
market, how is the organization and how has the board’s succession planning and oversight of
implementing plans to address talent development changed in response?
calls for better pay and
Top three
benefits, including flexibility, leadership behaviors
the opportunity to work from CEOs are Eighty percent Setting an
anywhere, programs to enhance putting of CEOs agree example of
Leading with
experimentation
humans at putting humans compassion
well-being, and funding for training at the center of
and
the center risk-taking
and educational advancement? decision-making
of decision- will be a core value
making and driver for Driving a
leadership. transformative
leadership. mindset
across the
company
EY survey of 305 CEOs
Q
Given that more than half of employees
say they would leave their job if flexibility
in their schedule and work location is
“Flexibility is a new normal. Employees love
and embrace the flexibility that tech-enabled
not extended after the pandemic, has remote work has made possible: 9 in 10
the organization considered how to regard flexibility as ‘extremely important.’
make flexibility integral to the company’s
Sarah Le Tourneur
human capital strategy?
EY Americas Future of Work Reimagined Leader
EY Center for Board Matters 2022 board priorities 13Talent oversight
Q Q
How is the company Is the board comfortable According to the World Economic Forum’s
seizing strategic with how the organization The Future of Jobs Report, 40% of workers will
opportunities to tap into is nurturing its existing require reskilling in the next six months or less.
larger talent pools, and future talent pools
diversify across numerous (e.g., reskilling and upskilling,
dimensions and expand
working hours across
educational alliances) to
position the company to 94%
time zones, while meet current requirements,
being mindful of work address enterprise risks
location, regulatory and and prepare for continued of business leaders say they expect
legislative challenges? strategic pivots? employees to learn these skills on the job.
Q
How is company leadership
enabling cross-functional
collaboration and seeking input
from a broader set of internal
“While agility, innovation and diversity are critical
to thriving, culture shortcomings are key barriers
constituencies to support an to these objectives; only 44% of CEOs affirm having
inclusive culture, enhance an innovation mindset across the organization.
engagement and spur innovation?
John M. De Yonge
How are these efforts measured? EY Global Markets EYQ Global Insights Director
Q
Are there any efforts to identify and address disconnects between how management views the employee
experience and the employee’s actual experience? Are employee engagement scores, periodic pulse checks,
summaries of exit and onboarding interviews, and social media data routinely reviewed?
“
Many leaders are simply disconnected from the realities of work
and from the realities of the people they employ to do it.
Maya Smallwood
EY Global People Advisory Services Employee Experience Leader
EY Center for Board Matters 2022 board priorities 14Talent oversight
Q Q
With continued
virtual work, how
is the company
addressing
“
A clearly defined corporate
purpose will allow employees
How is the company
embedding diversity and
inclusion into its workplace
policies and human capital
based both at home and in the
any impacts management programs
on employee
office to make decisions that throughout all steps in the
engagement, align with the organization’s employee life cycle to enable
inclusion long‑term goals. equitable opportunities,
and career advancement and
Falco Weidemeyer
development? EMEIA EY-Parthenon Leader compensation?
Source materials
• How the governance of human capital and talent is shifting
• The CEO Imperative: How can today’s leaders realize tomorrow’s opportunities?
• How to keep your people continuously ready for what is next
EY Center for Board Matters 2022 board priorities 15Questions to consider
Theme 4
Dynamic governance
Dynamic governance that addresses expanded
and changing oversight requirementsDynamic governance
Q
How is the board adopting a continual learning mindset
and strengthening its education program? Is the program
sufficiently tailored to the company’s and individual
board member’s needs, seeking diverse views from
inside and outside the company that allow for challenges
to status quo thinking?
Q
How can the board’s structure
be refreshed to be more agile,
future‑focused and aligned to the
“
One component of the traditional business
model has remained largely unchanged:
risks and opportunities on the board. New subcommittees may have been
the road ahead? Is the board
added, and diversity may be beginning to
considering the use of ad hoc
committees made up of directors, prevail, but essentially board operating models
management and third parties to still look as they always have.
address specific strategic issues? Sharon Sutherland
EY Global Center for Board Matters Leader
Q
How is the compensation committee evolving its charter to address oversight of broader human capital
issues? How does the board hold senior management accountable for progress against related goals via
incentive plans and other reward mechanisms? How is the company preparing for ongoing human capital
disclosure requirements?
“
This year 70% of Fortune 100 companies stated that diversity and inclusion or
other human capital matters are overseen by a board committee, up from 44%.
Compensation committees have emerged as the preferred oversight structure.
Jamie Smith
EY Americas Center for Board Matters
EY Center for Board Matters 2022 board priorities 17Dynamic governance
Q Q
How is the company refreshing How is the board thinking like an
its investor engagement strategy activist in considering and proactively
to be more efficient and addressing the company’s operating
productive? Is it considering new vulnerabilities? How is the board
engagement approaches (e.g., more obtaining an unfiltered view of
collaborative engagement via shareholder feedback on the company’s
working groups or investor strategy and pace of performance?
days)? Is it leveraging the proxy Do select individual board members
statement and other disclosures have direct dialogue with shareholders
as communication tools? to understand their priorities?
Q
Are information flows to the How boards would like the risk reporting they receive from the business to improve
board being appropriately More forward-looking and predictive 50%
challenged to include
more forward-looking More competitive intelligence 40%
and predictive insights, More coverage of emerging risks 34%
coverage of emerging risks,
external perspectives, and
More insights instead of data/metrics 31%
corroborating data from Underpinned by more external data 25%
third parties to keep pace Consolidate multiple reports 24%
with the evolving market,
economic and geopolitical More frequent 23%
developments? Is a Delivered on a real-time basis 22%
consent agenda used to
More concise 22%
maximize board discussion
of strategic initiatives? EY survey of 378 board members
Q
How is the board expanding its director search
to maximize diversity and broaden board
competencies in critical areas such as technology,
human capital management, cybersecurity, and
sustainability, and how are those individuals
onboarded to set them up for success?
EY Center for Board Matters 2022 board priorities 18Dynamic governance
Q Q
With increased board Is the board prepared for increased accountability as ESG matters
diversity, what changes become a multi-stakeholder priority and investors increasingly embrace
to its protocols proxy votes against directors as their most effective tool to accelerate
are being made to progress on ESG matters?
leverage diversity
of thought, improve
“
decision‑making and
create an inclusive
boardroom?
Investors increasingly see the effective management
of environmental and social risks and opportunities
as fundamental to long-term value creation and are
integrating related considerations into investment
decisions and stewardship. Like corporate governance
failings, a poor track record on sustainability issues can
galvanize shareholders against an incumbent board.
David A. Hunker
EY Americas Shareholder Activism Defense Leader
Q
With growing scrutiny of sustainability reporting and stakeholder concerns around greenwashing, how is the
board — particularly the audit committee — overseeing nonfinancial disclosures made in regulatory filings,
sustainability reports, analyst calls and other mediums? Are internal or external assurance procedures applied
to material assertions and data?
Q
Is the company progressively
reporting on human, customer
and societal value to attract
capital and meet the increasing
demand of stakeholders for
consistent and comparable ESG
and other nonfinancial‑related
data that aligns with evolving
external frameworks?
EY Center for Board Matters 2022 board priorities 19Dynamic governance
Q Q
What is the board’s policy for Could the board create more
timely review of corporate political effective meeting agendas
and lobbying expenditures and and protocols (e.g., consent
any public political positions taken agendas) to increase
by senior executives? How is the director engagement on
board assessing the alignment of priority matters? Can
those expenditures and positions virtual sessions augment
with the company’s values, and enhance traditional
commitments and strategy? in‑person meetings?
Source materials
• The Board Imperative: How today’s boards can meet tomorrow’s challenges
• What boards should know about ESG developments in the 2021 proxy season
• The Board Imperative: How can data and tech turn risk into confidence?
• What boards need to know about shareholder activism
For more context and related reading on all of these questions, visit
www.ey.com/us/boardmatters.
EY Center for Board Matters 2022 board priorities 20Critical questions for US boards to consider
Summary
of questionsSummary of questions
Theme 1:
Strategy and innovation 03 What data and metrics are 06 Has management appropriately and long-term greenhouse gas
being used to assess the health considered partnerships, joint reduction targets and related
and vibrancy of the organization’s ventures and alliances, along decarbonization initiatives?
01 How is the company rethinking culture and its alignment with with M&A, to accelerate the How is the company preparing
its definition of “long term” strategy? Is the culture appropriate strategy, particularly with for additional climate‑related
to maximize value while also to inspire and enable innovation? longer-term adjacent and disclosure requirements?
focusing on near‑term risks and transformational opportunities?
opportunities? Is the strategy 04 Is the company’s capital 09 How is the company investing
appropriately focused not allocation aligned with the 07 Are newer and innovative in protecting and restoring the
only on where the company is necessities of its long-term technologies, including digital natural ecosystems and biodiversity
going, but where it can go? strategy? How is the company platforms and cryptocurrency on which its business relies?
addressing barriers toward solutions, appropriately leveraged
02 Are material environmental, optimal allocation? to accelerate goals and objectives? 10 Does the board understand
social and governance (ESG) How can these technologies the company’s supply chain
issues considered in the company’s 05 Does the board have the accelerate the speed to market constraints? Is the board confident
long‑term strategic planning? appropriate governance and enhance virtual collaboration that the supply network is
How do the company’s business process to oversee strategic and customer engagement? flexible and agile amid continued
model, practices, products, investments that seed innovation global supply chain challenges?
and services address urgent to change the game? How is it 08 What is the company’s transition How is it addressing increased
environmental and social challenges supporting the acceleration of plan for thriving in a net-zero calls from stakeholders for
as we move toward a more idea generation, trialing and future? Is that plan integrated with sustainability and less waste?
inclusive and sustainable future? assessment while also encouraging the company strategy? Does it
appropriate risk‑taking? include specific short-, medium-
Theme 2:
Risk and resiliency environment, changes in the decisions, such as transactions, 09 How is the company assessing
strategy and risk landscape, and alliances, new products or services, the impact of physical and
the company’s operating model? and technology upgrades? transition climate risks on products
01 Do scenario analyses consider and services, supply chains and
an appropriate range of extreme 04 Has the board considered how 06 What types of data is the operations that can materially
and even improbable scenarios, the organization’s risk assessment organization collecting from its affect operating costs and
including existential threats? capabilities are evolving, including customers and other stakeholders revenues across the enterprise?
Do they incorporate the potential how analytics, artificial intelligence to better assess the trust, risks
compounding effects of various and other emerging technologies and opportunities related to 10 Has the organization’s tax
risks, such as supply chain can be used to review and changing preferences and needs? planning strategy been reevaluated
disruption, talent acquisition and validate data and information to How is the collection occurring? to address potential tax policy
retention, inflation, future interest unearth insights into enterprise changes, as well as impacts
rates and an evolving tax landscape? risks and opportunities? 07 How is the company scanning arising from potential shifts in the
and assessing geopolitical supply chain and capitalization?
02 Are contingency and response 05 How has the company’s Has the organization considered
developments, including a rapidly
plans related to material and cybersecurity risk management changing trade and regulatory growing stakeholder interest in
high‑impact risks, such as program evolved to address the landscape and governments tax transparency and potential
cybersecurity breaches and natural current environment in which moving to a more interventionist related reputational impacts?
disasters, periodically simulated attackers are targeting a policy position?
and reviewed with the board? larger surface area and using 11 Does the board understand
increasingly unpredictable 08 What is the company doing and approve the company’s data
03 How is the company revisiting tactics? How are cybersecurity privacy and data usage policy?
to address material social risks
and adapting its risk management and data privacy considerations across its value chain, including How is customer and employee
strategy and management’s proactively integrated into the treatment of employees and data use managed? Are social
approach to the three lines model all major strategy or tactical suppliers’ human rights practices surveillance algorithms reviewed for
in response to potential changes and impacts on customers and the bias? Is data protection considered
in the external and internal communities in which it operates? beyond cybersecurity protection?
EY Center for Board Matters 2022 board priorities 22Summary of questions
Theme 3:
Talent oversight anywhere, programs to enhance across numerous dimensions and 08 Are there any efforts to
well-being, and funding for training expand working hours across identify and address disconnects
and educational advancement? time zones, while being mindful between how management views
01 As the nature of work and of work location, regulatory the employee experience and the
employment further transforms, 03 How have the desired skills and and legislative challenges? employee’s actual experience?
how will the organization adapt behaviors for the organization’s Are employee engagement
its talent functions to realize its leaders evolved in response to the 06 Is the board comfortable scores, periodic pulse checks,
strategy? Does the board spend the events of the last two years, and with how the organization is summaries of exit and onboarding
same amount of time with the chief how has the board’s succession nurturing its existing and future interviews, and social media
human resources officer (CHRO) planning and oversight of talent talent pools (e.g., reskilling and data routinely reviewed?
discussing data and metrics to development changed in response? upskilling, educational alliances)
assess the health and welfare of the to position the company to meet 09 With continued virtual work,
workforce as it does with the CFO 04 Given that more than half of current requirements, address how is the company addressing any
reviewing and assessing the overall employees say they would leave enterprise risks and prepare for impacts on employee engagement,
financial health and stability? their job if flexibility in their continued strategic pivots? inclusion and career development?
schedule and work location is not
02 To attract and retain talent in a 07 How is company leadership 10 How is the company embedding
extended after the pandemic, has
hypercompetitive labor market, how the organization considered how enabling cross-functional diversity and inclusion into
is the organization implementing to make flexibility integral to the collaboration and seeking input its workplace policies and
plans to address calls for better pay company’s human capital strategy? from a broader set of internal human capital management
and benefits, including flexibility, constituencies to support an programs throughout all steps
the opportunity to work from 05 How is the company seizing inclusive culture, enhance in the employee life cycle to
strategic opportunities to tap engagement and spur innovation? enable equitable opportunities,
into larger talent pools, diversify How are these efforts measured? advancement and compensation?
Theme 4:
Dynamic governance Is it considering new engagement and sustainability, and how are and comparable ESG and other
approaches (e.g., more collaborative those individuals onboarded nonfinancial‑related data that aligns
engagement via working groups to set them up for success? with evolving external frameworks?
01 How is the board adopting or investor days)? Is it leveraging
a continual learning mindset the proxy statement and other 08 With increased board diversity, 12 What is the board’s policy for
and strengthening its education disclosures as communication tools? what changes to its protocols are timely review of corporate political
program? Is the program sufficiently being made to leverage diversity of and lobbying expenditures and
tailored to the company’s and 05 How is the board thinking thought, improve decision‑making any public political positions taken
individual board member’s like an activist in considering and create an inclusive boardroom? by senior executives? How is the
needs, seeking diverse views and proactively addressing the board assessing the alignment of
from inside and outside the company’s operating vulnerabilities? 09 Is the board prepared for those expenditures and positions
company that allow for challenges How is the board obtaining an increased accountability as ESG with the company’s values,
to status quo thinking? unfiltered view of shareholder matters become a multi‑stakeholder commitments and strategy?
feedback on the company’s strategy priority and investors increasingly
02 How can the board’s structure and pace of performance? Do select embrace proxy votes against 13 Could the board create more
be refreshed to be more agile, individual board members have directors as their most effective meeting agendas and
future‑focused and aligned to direct dialogue with shareholders effective tool to accelerate protocols (e.g., consent agendas)
the risks and opportunities on to understand their priorities? progress on ESG matters? to increase director engagement
the road ahead? Is the board on priority matters? Can virtual
considering the use of ad hoc 06 Are information flows to 10 With growing scrutiny sessions augment and enhance
committees made up of directors, the board being appropriately of sustainability reporting traditional in‑person meetings?
management and third parties to challenged to include more and stakeholder concerns
address specific strategic issues? forward‑looking and predictive around greenwashing, how is
insights, coverage of emerging the board — particularly the
03 How is the compensation risks, external perspectives, audit committee — overseeing
committee evolving its charter and corroborating data from nonfinancial disclosures made in
to address oversight of broader third parties to keep pace with regulatory filings, sustainability For more
human capital issues? How does
the board hold senior management
the evolving market, economic
and geopolitical developments?
reports, analyst calls and other
mediums? Are internal or external
context and
accountable for progress against
related goals via incentive plans
Is a consent agenda used to assurance procedures applied to related reading
maximize board discussion material assertions and data?
and other reward mechanisms? of strategic initiatives? on all of these
How is the company preparing
for ongoing human capital 07 How is the board expanding
11 Is the company progressively
reporting on human, customer and
questions, visit
disclosure requirements? its director search to maximize societal value to attract capital www.ey.com/us/
diversity and broaden board and meet the increasing demand
04 How is the company refreshing competencies in critical areas of stakeholders for consistent boardmatters.
its investor engagement strategy such as technology, human capital
to be more efficient and productive? management, cybersecurity,
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