Governance professionals in 2021 will be focusing their attention primarily on Environmental, Social and Governance (ESG) matters, remote working risk, climate change and diversity this year, according to a poll by ICSA: The Chartered Governance and governance recruitment specialist The Core Partnership. Of these, ESG is seen as the top priority, with the majority of respondents stating that it would be the biggest area of governance focus for 2021.
ESG was mentioned frequently by respondents with one participant saying: “ESG will have a significant focus this year and moving forward. The pandemic has firmly fixed the spotlight on the social conscience of companies and we must rise to the challenge”.
Peter Swabey, Policy and Research Director at the Chartered Governance Institute says: “ESG, corporate social responsibility and corporate stewardship are considered by many of our respondents to be where the main emphasis of governance will lie this year. ESG initiatives, sustainability, Section 172 issues, environmental and social impacts are cited, along with climate change, climate reporting/TCFD disclosures and Net Zero (the Green Agenda), as being important areas of focus.
“There are also expectations that a large part of this year’s work will centre around risk management and the management of risk related to greater remote working in particular. With so many people working from home compared to pre-COVID times, governance professionals expect there to be work to do around risk and controls and information security. Alongside newer priorities such as this, perennial boardroom issues such as improving diversity and inclusion remain. Executive remuneration, such as ensuring performance conditions are appropriate in a COVID environment, and stakeholder engagement are also high on the list of priorities for governance professionals this year.”
When asked what the biggest governance focuses for 2021 were likely to be, other answers included the following:
- Getting staff back to work, staff resilience and mental health issues
- How companies adapt AGMs to enable greater participation by shareholders remotely
- Greater emphasis on treating customers fairly and consideration of staff wellbeing
- Learning from 2020 – what worked and what to keep. Building COVID learning into the new normal.
- Responsible organisations – use of government assistance, treating employees well and adhering to COVID secure guidelines
- IT and AI, including cyber security and privacy post-Brexit
- Changes in regulation and regulatory change related to Brexit
- Audit, risk and control, including quality and competency of auditors
- Culture (including probity, diversity and inclusion)
- Planning for unforeseen events
- Sustainability, operational resilience and financial resilience
- Board meetings and communications generally, ensuring these remain effective and we can provide the same level of assurances
- Investor focus on the organisation’s response to the pandemic and the Board’s ability to govern effectively in the face of COVID-19.