With a new year well underway, his latest article revisits the hot-button topics of years past to assess their relevance: Where do these topics fall on the board’s priority list? Which ones are keeping institutional investors up at night? Which ones—if poorly managed—are likely to attract shareholder activists?
Below, we give you just a sampling from Kerstetter’s article: Take Aim: The Top 20 Issues You Should Have in Your Sights for 2017. To read the full article, check out the latest edition of C-Suite Magazine.
Cyber Risk. We don’t know exactly how big of an issue this could become in 2017. What we do know is how much boards don’t know about this topic. Spend time to determine a structure and a process for protecting your most valuable assets. Determine what committee will own cyber security, and don’t be afraid to consider a risk committee if the audit committee agenda is already overloaded.
Shareholder Engagement. Investors were clear this year that not all companies need to engage if there are no concerning issues. Props go to companies that recognize a concern and reach out proactively. All investors (particularly activists) expect a prudent response if they have identified obvious concerns and have requested time with a board representative. Large investors and asset managers are publicly supporting long-term planning and investment in an attempt to alter short-termism. Act accordingly.
Board Compensation. Expect much more attention on what and how directors are being paid in 2017. After several Delaware court cases focusing on boards being over-compensated, compensation committees will now need to make sure director pay is fair and standard within their peer group. Investors are pushing for a cap on how high any board incentive or stock-related pay can go.
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