2 A geopolitical lens from Eurasia Group

4 On the 2020 board agenda

8 On the 2020 audit committee agenda

11 Financial reporting and auditing update

12 On the 2020 nom/gov committee agenda

14 Getting strategic on ESG issues

What’s insideOn the 2020 agendaDespite signs of stagnation in the Eurozone, relatively strong economic growth forecasts for both the U.S. and China in 2020—perhaps coupled with reduced trade tensions—provide some reassurance that the global economy will likely avoid a slowdown in the coming year. In the U.S., low inflation, low unemployment, no imminent rate hikes by the Fed, and progress on the U.S.-Mexico-Canada Agreement all point to a continuation of the longest economic expansion on record. Yet, Fed Chairman Powell’s recent caution that “None of us have much of a sense of what the economy will be like in 2021”1 will no doubt give many companies pause in the coming months on expenses, investments, and hiring. To be sure, companies should use these favorable economic conditions to prepare for challenges ahead. The outcome of U.S. elections could result in significantly different regulatory directions—on taxes, healthcare, energy, and more. The pace of tech and digital disruption continues to accelerate. Geopolitics may test the reliability of supply chains and markets. And the continued shift toward stakeholder-centric governance—linking the interests of employees, customers, communities, and suppliers with that of investors—should prompt companies to sharpen their discussions about what long-term value looks like. To help focus boardroom conversations on these and other critical issues, this quarter we share our thoughts on board agendas in 2020 as well as key areas for audit and nominating and governance committee focus. Also in this edition, Ian Bremmer of Eurasia Group offers his views on the geopolitical outlook and sustainability veteran Bob Langert shares insights for integrating environmental, social, and governance issues with strategy. We’ll tackle these topics and more at our annual Board Leadership Conference (January 6–8 in Huntington Beach, California), with insights from presidential historians Doris Kearns Goodwin and Jon Meacham and Retired General James Mattis, former Secretary of Defense, among others. We hope you find Directors Quarterly helpful as you consider your board and committee agendas for the year ahead.

Dennis T. Whalen Leader KPMG Board Leadership Center

Directors QuarterlyJanuary 2020

Insights from the Board Leadership Center

Directors QuarterlyInsights from the Board Leadership Center

1Transcript of Federal Reserve Chairman Jerome Powell’s press conference, December 11, 2019.

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by Ian Bremmer, President, Eurasia Group

What’s our current geopolitical trajectory?

Still negative, much of which can be directly traced to the continuing deterioration of the U.S.-China relationship. For all the talk of a “Phase One”

deal, it does little to address the underlying dynamics of the relationship. China believes its economic ascendance entitles it to more of a say in world affairs and the structure of international architecture; meanwhile, the U.S. is torn between its desire to step away from its global leadership role (and the costs that come with it) while still attempting to maintain its primacy across all international spheres—a contradictory set of desires that requires compromise of both U.S. priorities and resources.As Beijing continues to assert a more active role in international affairs, it will face increasing blowback from countries who feel threatened by China’s rise.

While the U.S.-China dynamic continues to destabilize the globe at a structural level, it has also resulted in a U.S. less willing to push other foreign adversaries while still locked in battle with Beijing. Over the last quarter, that has meant some distraction from North Korea, Venezuela and Iran. It has also meant that the U.S. has been less inclined to follow up provocative Iranian actions in the Gulf.

A geopolitical lens

What’s driving the current trends?

Speaking of Iran, the Iranian people have plenty to worry about these days; top of mind is the country’s deteriorating economic situation. Iran’s leaders want to maintain an aggressive façade in the wake of the U.S. pull-out from the Joint Comprehensive Plan of Action nuclear deal, but they also must account for financial realities. Tehran’s decision to raise gasoline prices as part of a plan to stabilize the country’s finances touched off the deadliest protests the country has seen in four decades.

Fuel prices have played a prominent role in some of the world’s most visible protests in recent months. In Ecuador, President Lenín Moreno’s decision to scrap long-standing fuel subsidies brought thousands of Ecuadorians to the streets and forced him to relocate the country’s capital for a few days given the accompanying violence. In Chile, a four-cent tax hike to train fares (to account for rising fuel prices) has plunged Santiago into a weeks-long political crisis, prompting current president Sebastián Piñera to offer to rewrite the country’s constitution in a desperate attempt to keep the peace.

Recent months have also seen a marked uptick in anti-corruption protests. The ones in Lebanon (originally over a proposed tax on social media, but quickly swelling to encompass broader social discontent) have already brought down its government. The issue of corruption recently forced Egyptians to the streets in numbers not seen since the Arab Spring. In Bolivia, former President Evo Morales's barefaced attempts to secure an unprecedented fourth term as president sparked protests that sent him fleeing.The views and opinions expressed herein are those of

the interviewee and do not necessarily represent the views and opinions of KPMG LLP.

2 Directors Quarterly | January 2020

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In Spain, harsh prison sentences for Catalan leaders brought Spaniards to the streets and helped produce yet another hung parliament in elections shortly thereafter. And, of course, Hong Kong continues to be engulfed in chaos as pro-democracy advocates fight to keep the few democratic freedoms they have left under Beijing’s lengthening shadow.

Each particular protest movement has its own flavor and characters, but two threads unite them. First, all of these protests are fundamentally about fairness—the perception that there are some members of society who are getting shortchanged through no fault of their own. For decades, inequality around the world has been widening—in terms of incomes, public resources, opportunities, etc. Combined with technology, people now have more effective tools than ever to give voice to their frustrations and orchestrate protests in opposition.

Second, these protests highlight an overall trend of individual countries focusing inwards. And as global economic growth continues to soften and inequality continues to expand, this is a trend that’s only set to intensify, spelling bad news for an international community and institutions that are already in the process of eroding.

What should you watch out for in the next quarter?

Pay close attention to the U.S. Democratic primary. While the Democrats are unified in their desire to oust President Trump from the Oval Office, there is enough disagreement about what should come next that it’s still far too early to say whether a Democratic victory would be market-positive or market-negative. We should have a better sense of who has a decent shot to prevail on the Democratic side—and what kind of economic policies they espouse—over the course of the next few months.

And continue to pay attention to the U.S.-China relationship. Big challenges remain around Hong Kong, the South China Sea, intellectual property, and technology; combined with the U.S. presidential contest, there is no shortage of interesting plot twists that can come about these next few months.

And for a more macro perspective, the next year is set to be the most significant for climate change since the Kyoto Protocol came into effect in 2005, and the next quarter will see momentum and activity pick up. We’ve recently seen almost weekly announcements by major investors and corporations (individually or collectively) making commitments to align their activities to the Paris Climate Agreement goals. Civil society groups—most notably the movement inspired

by Swedish activist Greta Thunberg—are becoming increasingly vocal in their demands for climate action and bolder in their protest action. That has all the makings for market shocks—either because of civil unrest as grassroots movements like Extinction Rebellion clash with governments or because of potential asset price booms and

busts as investors move their money to meet environmental, social, and governance commitments but without clear policy and regulatory signals. Plenty of political drama in store for us all in 2020.

Feel free to write to me, bremmer@eurasiagroup.net, if you want to go deeper on any of this or talk about a topic I didn’t have space to cover.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG LLP.

January 2020 | Directors Quarterly

The next year is set to be the most significant for climate change since the Kyoto Protocol came into effect in 2005.

3

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Link boardroom discussions on strategy, risk, and global disruption.

Trade wars, Brexit, rising populism, cyberattacks on critical infrastructure, and the threat of military conflict in geopolitical hotspots—combined with an absence of global leadership and the deterioration of international governance—will continue to drive global volatility and uncertainty. As Ian Bremmer, Eurasia Group’s founder and president, has noted, this environment “will require more investment in scenario planning and stress testing. It also means drawing up contingency plans to shorten supply chains, cutting long-term fixed costs, and limiting business exposure to political relationships that have considerable potential to go south.”

Companies also need to address the potential disruption to business models posed by accelerating advances in digital technologies such as robotic process automation, machine learning, artificial intelligence, and blockchain. Are the company’s risk management processes adequate to address the speed and disruptive impact of these advances, and to assess the continuing validity of the key assumptions that form the basis of the company’s strategy and business model? Tomorrow’s competitors are likely to be different than yesterday’s.

Help management reassess the company’s processes for identifying the risks and opportunities posed by disruption—geopolitical, technological and digital, social, and environmental—and their impact on the company’s long-term strategy. Is there an effective process to monitor changes in the external environment and provide early warning that adjustments to strategy might be necessary? Help the company test its strategic assumptions and keep sight of how the big picture is changing: connecting dots, thinking differently, and staying agile and alert to what’s happening in the world. In short, disruption, strategy, and risk should be hardwired together in ongoing boardroom discussions.

Understand how the company aligns profit and purpose.

Corporate growth and shareholder return still require the essentials—managing key risks, innovating, capitalizing on new opportunities, and executing on strategy—but the context for corporate performance

4 Directors Quarterly | January 2020

Prioritizing board agendas will be particularly challenging in 2020 as the game-changing implications of technological and digital innovation, growing demands to address environmental and social issues, scrutiny of corporate culture, and investor expectations for greater board engagement, diversity, and long-term performance all drive a sharper focus on positioning the company for the future. Combined with concerns about the economy—mounting trade tensions, resurging debt, a looming market correction—and geopolitics, the year ahead will require a careful balance of near-term focus, agility, and long-term thinking.

On the 2020 board agenda

Drawing on insights from our work and interactions with directors and business leaders, we highlight eight items for boards to consider as they focus their 2020 agendas on the critical challenges at hand and on the road ahead:

– Link boardroom discussions on strategy, risk, and global disruption.

– Understand how the company aligns profit and purpose.

– Build the talent in the boardroom around the company’s strategy and future needs.

– Help set the tone and closely monitor the culture throughout the organization.

– Approach cybersecurity and data privacy holistically—as data governance.

– Make CEO succession and talent development a priority.

– Have a crisis response plan in place and practice it.

– Be proactive in engaging with shareholders, including activists.

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5January 2020 | Directors Quarterly

is changing quickly, and perhaps profoundly. Mounting societal issues—including jobs and wages, income inequality, climate and environmental issues, health and safety, and calls for greater diversity and inclusion, coupled with limited government solutions—continue to heighten expectations for corporations to help address the gaps and rethink their responsibility to society.

Major institutional investors have long emphasized their expectations for companies to explain how they are addressing environmental, social, and governance (ESG) issues in the context of long-term value creation. Employee and consumer activism regarding ESG issues is in its early stages but is growing, driven largely by millennials. We continue to see a number of shareholder proposals on ESG issues—particularly on the “E” and the “S” issues. More recently, echoing BlackRock CEO Laurence Fink’s focus on “linking purpose and profits,” the Business Roundtable (BRT) issued its Statement on the Purpose of a Corporation, in which the signatory CEOs committed “to lead their companies to benefit all stakeholders—customers, employees, suppliers, communities, and shareholders.”Reactions from the business and investor communities to the BRT statement have varied widely. Some see it as an important commitment to stakeholders by corporate America. Others, such as the Council of Institutional Investors, expressed concern that the statement undercuts notions of managerial accountability to shareholders, and that boards and managers need to stay focused on long-term shareholder value. Still others see the statement as business as usual.

Whether or not a company supports the BRT Statement, it will likely face increasing pressure from stakeholders to develop its own statement of purpose (if it hasn’t already) articulating the company’s commitment to stakeholders and how it will factor stakeholder considerations into efforts to create long-term value. Investors, customers, employees, and other stakeholders are challenging companies to understand that there is an inextricable link between purpose and profit. The board has a key role to play in shaping the debate and setting the tone and expectations for linking purpose and profit. As stakeholder expectations for transparency and disclosure regarding these issues continue to mount,

the board should be intentional about how it engages with management on these issues. (For more on communicating ESG-related activities to shareholders, see On the 2020 audit committee agenda.)

Build the talent in the boardroom around the company’s strategy and future needs.

Given the demands of today’s business and risk environment, boards are increasingly focused on aligning board composition with the company’s strategy, both today and longer term. Talent and diversity in the boardroom are also front and center for investors, regulators, and other stakeholders. That said, it’s clear that the world is changing markedly faster than boards.

According to Spencer Stuart’s 2019 U.S. Board Index of S&P 500 companies, board turnover remains low (0.88 new directors per board annually). Average director tenure (8 years) has changed little, while average director age has risen slightly in the last decade (to 62.7). Progress on board diversity is constant but there is still a long way to go—26 percent of S&P 500 directors are women, and 19 percent of the directors in the top 200 of these companies are African American, Latino, or Asian. Tenure-limiting mechanisms—term limits and mandatory age limits—have had limited impact, and that is not surprising: only 5 percent of boards have term limits for independent directors, and the most common mandatory retirement age is 75, with many boards expressly permitting exceptions to the policy.1

The increased level of investor engagement on this topic highlights investor frustration over the slow pace of change in boardrooms, and points to the central challenge with board composition: a changing business and risk landscape. Addressing competitive threats and business model disruption, technology innovations and digital changes, cyber risk, and global volatility requires a proactive approach to board building and board diversity—of skills, experience, gender, and race/ethnicity. As part of its Boardroom Accountability Project 3.0, in October, the Office of the New York City Comptroller sent letters to 56 S&P 500 companies requesting that they “adopt a diversity search policy requiring that the initial lists of candidates from which new management-supported director nominees and chief executive officers (CEOs) are

1 2019 U.S. Spencer Stuart Board Index.

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6 Directors Quarterly | January 20206

chosen include qualified female and racially/ethnically diverse candidates” (sometimes referred to as the “Rooney Rule”).

It’s clear that board composition and diversity should be a key area of board focus in 2020, as a topic for communications with the company’s institutional investors, enhanced disclosure in the company’s proxy, and positioning the board strategically for the future.

Help set the tone and closely monitor the culture throughout the organization.

Does the company make it safe for people to do the right thing? Headlines of sexual harassment, price gouging, aggressive sales practices, and other wrongdoing continue to put corporate culture front and center for companies, shareholders, regulators, employees, and customers. Boards themselves are also making headlines—particularly in cases of self-inflicted corporate crises—with investors, regulators, and others asking, “Where was the board?”

Given the critical role that corporate culture plays in driving a company’s performance and reputation—for better or, as evidenced by #MeToo, for worse—we see boards taking a more proactive approach to understanding, shaping, and assessing corporate culture. Have a laser focus on the tone set by senior management and zero tolerance for conduct that is inconsistent with the company’s values and ethical standards, including any “code of silence” around such conduct. Be sensitive to early warning signs and verify that the company has robust whistle-blower and other reporting mechanisms in place and that employees are not afraid to use them.

Understand the company’s actual culture (the unwritten rules versus those posted on the breakroom wall); use all the tools available—surveys, internal audit, hotlines, social media, walking the halls, and visiting facilities—to monitor the culture and see it in action. Recognize that the tone at the top is easier to gauge than the mood in the middle and the buzz at the bottom. How does the board gain visibility into the middle and bottom levels of the organization? Make sure that incentive structures align with strategy and encourage the right behaviors, and take a hard look at the board’s own culture for signs of groupthink or discussions that lack independence or contrarian voices. Focus not only on results but on the behaviors driving results.

Approach cybersecurity and data privacy holistically—as data governance.

In our conversations with directors, it is clear that many companies need a more rigorous, holistic approach to data governance—the processes and protocols in place around the integrity, protection, availability, and use of data.

Boards have made strides in monitoring management’s cybersecurity effectiveness—for example, with greater IT expertise on the board and relevant committees, company-specific dashboard reporting to show critical risks, and more robust conversations with management focusing on critical cybersecurity risks, operational resilience, and the strategies and capabilities that management has deployed to minimize the duration and impact of a serious cyber breach. Despite these efforts, given the growing sophistication of cyberattackers, cybersecurity will continue to be a key challenge.

Data governance overlaps with cybersecurity, but it’s broader. For example, data governance includes compliance with industry-specific privacy laws and regulations, as well as new privacy laws and regulations that govern how personal data—from customers, employees, or vendors—is processed, stored, collected, and used. Examples include the EU General Data Protection Regulation that went into effect in May 2018 and the California Consumer Privacy Act, which took effect at the beginning of this year. Data governance also includes the company’s policies and protocols regarding data ethics—in particular, managing the tension between how the company may use consumer data in a legally permissible way with consumer expectations as to how their data will be used. Managing this tension poses significant reputation and trust risks for companies and represents a critical challenge for leadership.

To help develop a more rigorous approach around oversight of data governance:

– Insist on a robust data governance framework that makes clear how and what data is being collected, stored, managed, and used, and who makes decisions regarding these issues.

– Clarify which business leaders are responsible for data governance across the enterprise—including the roles of the chief information officer, chief information security officer, and chief compliance officer.

– Reassess how the board—through its committee structure—assigns and coordinates oversight responsibility for both the company’s cybersecurity and data governance frameworks, including privacy, ethics, and hygiene.

Make CEO succession and talent development a priority.

Few board responsibilities are more important than hiring and firing the CEO—a reality that continues to hit the headlines, particularly if the board is caught flat-footed. Given the complex and disruptive business and risk environment, it is essential that the company

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operational risks? What’s changed in the operating environment? Has the company experienced any control failures? Is management sensitive to early warning signs regarding safety, product quality, and compliance?

Help ensure that management is weighing a broad spectrum of what-if scenarios—from supply chains and the financial health of vendors to geopolitical risks, natural disasters, terrorist acts, and cyber threats. Is the company’s crisis response plan robust and ready to go? Does it cover different scenarios? Is the plan actively tested or war-gamed and updated as needed? Does it take into account the loss of critical infrastructure, e.g., telecommunications networks, financial systems, transportation, and energy supplies? Does it include communications protocols to keep the board apprised of events and the company’s response—and to address the company’s stakeholders?

Be proactive in engaging with shareholders, including activists.

Shareholder engagement continues to be a priority for companies as institutional investors increasingly hold boards accountable for company performance and demand greater transparency, including direct engagement with independent directors. Institutional investors expect to be able to engage with portfolio companies—especially when there are governance concerns or when engagement is needed to make a more fully informed voting decision. Boards should request periodic updates from management about the company’s engagement practices: Do we know and engage with our largest shareholders and understand their priorities? Do we have the right people on the engagement team? What is the board’s position on meeting with investors? Which independent directors should be involved? And perhaps most importantly, is the company providing investors with a clear, current picture of its performance, challenges, and long-term vision?

As reflected in 2019 proxy trends, strategy, executive compensation, management performance, ESG initiatives, and board composition and performance will remain squarely on investors’ radar during the 2020 proxy season. We can also expect investors to focus on how companies are adapting their strategies to address the economic and geopolitical uncertainties and dynamics shaping the business and risk environment in 2020.

7January 2020 | Directors Quarterly

have the right CEO in place to drive strategy, navigate risk, and create long-term value for the enterprise. The board should ensure that the company is prepared for a CEO change—planned and unplanned. CEO succession planning is a dynamic and ongoing process. Boards must always be thinking about developing potential candidates, and planning for succession should start the day a new CEO is named. How robust are the board’s succession planning processes and activities? Are succession plans in place for other key executives?

Clearly linked to the importance of having the right CEO is having the talent required—from the top of the organization down through the ranks—to execute the company’s strategy and keep it on track. Institutional investors are becoming more vocal about the importance of human capital and talent development programs and their link to strategy. We expect companies will face an increasingly difficult challenge in finding, developing, and retaining talent that is required at all levels of the organization. Does management’s talent plan align with its strategy and forecast needs for the short and long term? Which talent categories are in short supply and how will the company successfully compete for this talent? More broadly, as millennials and younger employees join the workforce in large numbers and talent pools become globally diverse, is the company positioned to attract, develop, and retain top talent at all levels? Compensation committees should continue to sharpen their focus on talent development, and consider including succession planning and talent development as a performance metric tied to pay plans.

Have a crisis response plan in place and practice it.

It’s a sobering data point: Between 2010 and 2017, headlines with the word “crisis” and the name of one of the top 100 companies as listed by Forbes appeared 80 percent more often than in the previous decade.2

Even the best-prepared companies will experience a crisis, and companies that respond quickly and effectively tend to weather crises better. Crisis readiness goes hand-in-hand with good risk management—identifying and anticipating risks and putting in place a system of controls to help prevent crises or mitigate their impact. We’re clearly seeing an increased board focus on cultural risks as well as key operational risks across the extended global organization—e.g., supply chain and outsourcing risks, information technology and data security risks, etc. Does the board understand the company’s critical

2 Sanjay Kalavar and Mihir Mysore, “Are you prepared for a corporate crisis?” McKinsey Quarterly (April 2017).

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8 Directors Quarterly | January 2020

On the 2020 audit committee agenda

Maintain (or regain) control of the committee’s agenda.

This number one priority from last year holds true for 2020. Nearly half of the 1,300 audit committee members responding to our 2019 global audit committee survey said it is “increasingly difficult” to oversee the major risks on the audit committee’s agenda in addition to its core oversight responsibilities (financial reporting and related internal controls, and oversight of internal and external auditors). Aside from any new agenda items, the risks that many audit committees have had on their plates for some time—financial risks; cybersecurity and information technology risks; ESG risks; third-party, supply chain, and other operational risks; legal and regulatory compliance—have become more complex. Reassess whether the committee has the expertise and time to oversee the risks it has been assigned. Do cyber risk and data governance require greater attention from the full board—or perhaps a dedicated committee? Keeping the audit committee’s agenda focused—and its eye on the ball—will require discipline and vigilance in 2020.

Reinforce audit quality and set clear expectations for the external auditor.

Audit quality is enhanced by a fully engaged audit committee that sets the tone and clear expectations for the external auditor and monitors auditor performance rigorously through frequent, quality communications and a robust performance assessment. (See the Center for Audit Quality’s External Auditor Assessment Tool released in April 2019.) Pay close attention to the PCAOB’s quality control initiatives, as the PCAOB staff has announced that it is developing a concept release for the Board’s consideration and may seek amendments to the PCAOB’s quality control standards. Probe the audit firm on its quality control systems that are intended to drive sustainable, improved audit quality—including the firm’s implementation and use of new technologies. A September 2019 speech by PCAOB board member Duane M. DesParte (Improving Audit Quality through a Renewed Focus on Quality Control ) highlighted key elements of a firm’s quality control (QC) system to include “areas of firm governance and structure, QC system risk assessment and monitoring, continuous improvement, and transparency.” In discussions with

Prioritizing a heavy audit committee agenda is never easy, and 2020 will be particularly challenging. The audit committee is operating against a backdrop of global volatility and economic uncertainty—e.g., mounting trade tensions, resurging debt, a looming market correction, technology and business model disruption, cyber risk, regulatory scrutiny, investor demands for transparency, and geopolitics.

Drawing on insights from our latest survey work and interactions with audit committee members and business leaders, we’ve flagged seven issues that audit committees should keep in mind as they consider and carry out their 2020 agendas:

– Maintain (or regain) control of the committee’s agenda.

– Reinforce audit quality and set clear expectations for the external auditor.

– Closely monitor management’s progress on implementing FASB’s new credit loss standard.

– Redouble your focus on the company’s ethics, compliance, and whistle-blower programs.

– Understand how technology is impacting the finance organization’s talent, efficiency, and value-add.

– Reassess the scope and quality of environmental, social, and governance (ESG)/sustainability reports and disclosures.

– Help ensure internal audit’s eyes and ears are focused on key risks beyond financial reporting.

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9January 2020 | Directors Quarterly

the external auditor regarding the firm’s internal quality control system, consider the results of PCAOB and internal inspections and efforts to address deficiencies. Remember that audit quality is a team effort, requiring the commitment and engagement of everyone involved in the process—the auditor, audit committee, and management.

Closely monitor management’s progress on implementing FASB’s new credit loss standard.

The effective date of the standard—January 1, 2020, for calendar-year public companies—is imminent, and implementation efforts should be nearing conclusion. Both financial services and nonfinancial services companies will be affected, as a variety of financial instruments are within the scope of the new standard. Given the magnitude of the implementation effort for many companies, we recommend two broad areas of focus for audit committees. First, understand how management has determined the transition impact of adoption—which must be disclosed in the company’s 2019 Form 10-K as a Staff Accounting Bulletin (SAB) 74 transition disclosure—and what the external auditor has done to evaluate the transition impact. What are the external auditor’s recommendations regarding the adequacy of the SAB 74 disclosure? Second, discuss with management and understand the company’s readiness to operate and report under the standard in 2020. Topics for discussion with management include the impact on internal control over financial reporting; new disclosure requirements regarding assumptions, models, and methods for estimating the allowance for credit losses; and the impact on disclosure controls and procedures. Obtain the views of the external auditor regarding the company’s readiness, as the auditor is in a unique position to provide insights on the company’s reporting processes and internal controls.

In November, the FASB issued an ASU to delay implementation of the credit loss standard for SEC filers eligible to be smaller reporting companies, public companies that are not SEC filers, and private companies, including not-for-profit entities and employee benefit plans. Those benefiting from the delay will be required to adopt the standard in 2023. Eligible companies should take advantage of this time to learn from the implementation issues encountered

by larger SEC filers, confirm the preparedness of their technologies and systems (or develop new solutions) to comply with the new accounting and reporting requirements, and solidify their business processes and controls over implementation and subsequent accounting.

Redouble your focus on the company’s ethics, compliance, and whistle-blower programs.

The reputational costs of an ethics or compliance failure are higher than ever. Fundamental to an effective compliance program is the right tone at the top and culture throughout the organization, which supports the company’s strategy, including its commitment to its stated values, ethics, and legal/regulatory compliance. This is particularly true in a complex business environment, as companies move quickly to innovate and capitalize on opportunities in new markets, leverage new technologies and data, and engage with more vendors and third parties across longer and increasingly complex supply chains. Coupled with the challenging global regulatory environment—the array of new data privacy, environmental, healthcare, financial services, and consumer protection regulations, as well as FCPA and the UK Bribery Act—compliance risks and vulnerabilities will require vigilance. Closely monitor the tone at the top and culture throughout the organization with a sharp focus on behaviors (not just results) and yellow flags. Does the company’s culture make it safe for people to do the right thing? Help ensure that the company’s regulatory compliance and monitoring programs are up to date, cover all vendors in the global supply chain, and clearly communicate the company’s expectations for high ethical standards. Focus on the effectiveness of the company’s whistle-blower reporting channels and investigation processes through a #MeToo lens. Does the audit committee see all whistle-blower complaints? If not, what is the process to filter complaints that are ultimately reported to the audit committee? As a result of the radical transparency enabled by social media, the company’s culture and values, commitment to integrity and legal compliance, and brand reputation are on full display.

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meeting their commitments to these stakeholders, including metrics. Given the increasing stakeholder demands for more transparent, higher-quality ESG reporting—and concerns about the lack of comparability of ESG data—the audit committee can serve as a catalyst, recommending that the board encourage management to reassess the scope and quality of the company’s ESG reports and disclosures. This may be a significant undertaking and would likely include benchmarking against peers, consideration of the methodologies and standards of various firms that rate companies on ESG practices, understanding the expectations of investors and other stakeholders, and reviewing various ESG reporting frameworks for possible use by the company. To bring the right focus and attention, a board committee, such as the audit or governance committee (depending on bandwidth and expertise), should oversee the effort. Management’s disclosure committee should be part of these discussions to help ensure that the company has the necessary infrastructure—including disclosure controls and procedures—to support its ESG reporting.

Help ensure internal audit’s eyes and ears are focused on key risks beyond financial reporting.

In recent years, a number of highly publicized corporate crises have damaged company reputations, due in part to failure to manage key risks such as tone at the top and culture, legal/regulatory compliance, incentive structures, cybersecurity and data privacy, ESG risks, and global supply chain and outsourcing risks. The audit committee should work with the chief audit executive and chief risk officer to help identify the risks that pose the greatest threat to the company’s reputation, strategy, and operations and to help ensure that internal audit is focused on these key risks and related controls. Is the audit plan risk-based and flexible—and does it adjust to changing business and risk conditions? What’s changed in the operating environment? What are the risks posed by the company’s digital transformation and by the company’s extended organization—sourcing, outsourcing, sales, and distribution channels? Are we sensitive to early warning signs regarding safety, product quality, and compliance? What role should internal audit play in auditing the culture of the company? Set clear expectations and help ensure that internal audit has the resources, skills, and expertise to succeed—and help the chief audit executive think through the impact of digital technologies on internal audit.

10 Directors Quarterly | January 202010

Understand how technology is impacting the finance organization’s talent, efficiency, and value-add.

Major technology changes impacting finance organizations present important opportunities for finance to reinvent itself and add greater value to the business. As audit committees monitor and help guide finance’s progress in this area, we suggest three areas of focus. First, recognizing that as much as 60 to 80 percent of finance’s work involves data gathering, what are the organization’s plans to leverage robotics and cloud technologies to automate as many manual activities as possible, reduce costs, and improve efficiencies? Second, how will finance use data analytics and artificial intelligence to develop sharper predictive insights and better deployment of capital? The finance function is well-positioned to guide the company’s data and analytics agenda and to consider the implications of new transaction-related technologies, from blockchain to crypto-currencies. As historical analysis becomes fully automated, the organization’s analytics capabilities should evolve to include predictive analytics, an important opportunity to add real value. Third, as the finance function combines strong analytics and strategic capabilities with traditional financial reporting, accounting, and auditing skills, its talent and skill-set requirements must change accordingly. Is finance attracting, developing, and retaining the talent and skills necessary to match its evolving needs? In this environment, it is essential that the audit committee devote adequate time to understand finance’s transformation strategy.

Reassess the scope and quality of ESG/sustainability reports and disclosures.

Nearly all S&P 500 companies provide some form of ESG or sustainability reports today, but there are growing concerns by a range of stakeholders—investors, employees, customers, regulators, and activists—regarding the quality, comparability, reliability, and usefulness of these reports. ESG reporting has been of growing importance to institutional investors for many years, with investors demanding more information and seeking engagement with companies on core ESG issues and their impact on the company. Employee and consumer activism regarding ESG issues is in its early stages—but is growing—particularly among millennials. And, of course, we continue to see a large number of shareholder ESG proposals—particularly on the “E” and the “S” issues.

The Business Roundtable Statement on the Purpose of a Corporation (to benefit all stakeholders—customers, employees, suppliers, communities, and shareholders) will likely increase expectations for companies to articulate in ESG or sustainability reports how they are

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11January 2020 | Directors Quarterly

Financial reporting and auditing update2019 AICPA conference highlightsThe AICPA held its annual Conference on Current SEC and PCAOB Developments, featuring speakers from regulators, standard setters, preparers, auditors and others who discussed recent developments in accounting, auditing, and financial reporting. Keynote speakers included SEC Chairman Jay Clayton, FASB Chairman Russell Golden, and the five members of the PCAOB.

An overarching theme of the conference was change—including the importance of stakeholder communications in maintaining investor confidence and in the delivery of quality financial reporting during this period of dramatic change. Rapid changes in technology, global volatility, and economic uncertainty—coupled with investor demands for transparency—are creating new and enhanced risks in the financial reporting structure that will affect the roles and responsibilities of management, audit committees, and auditors beyond the 2019 year-end financial reporting season. Speakers emphasized that to maintain the high quality financial reporting that is essential to the capital markets, all stakeholders within that reporting structure must work collaboratively to identify and address the expanding array of risks.

Highlights included:

– Emerging issues for preparers—Responding to reference rate reform (LIBOR) and to demands from stakeholders for additional corporate information, and developing disclosures for other emerging issues;

– New accounting standards—Addressing implementation issues related to new major accounting standards, including revenue recognition, leases, and credit losses;

– Technology change—Assessing risks of blockchain, the challenges presented by digital assets, and the International Accounting Standards Board’s response to digitization of financial analysis;

– SEC focus areas—Evaluating the adequacy of non-GAAP financial measures and structured payables disclosures, communicating with audit committees, managing interactions with registrants, enforcing SEC rules and regulations; and

– PCAOB activity—Evaluating the implementation of critical audit matters (CAMs), improving outreach to constituents, and enhancing auditor inspections and quality control standards.

Regarding LIBOR, SEC Chairman Jay Clayton cautioned preparers not to underestimate the consequences and complexity of reference rate reform. He also emphasized the importance of early consultation with the SEC staff for successful transition. Separately, a representative from the SEC Division of Corporation Finance advised companies to continue to focus on appropriate disclosures about the effects of reference rate reform.

Representatives from the SEC and PCAOB shared their views regarding CAMs implementation. A representative from the SEC Office of the Chief Accountant made it clear that implementing CAMs is a priority for the SEC staff and the PCAOB. Additionally, a representative from the SEC Division of Corporation Finance said that the SEC staff will review CAMs and issue a comment letter if a company’s filing does not reflect the importance of the matter underlying a CAM.

As a reminder, auditors of large accelerated filers are required to comply with the requirements to communicate CAMs for the first time for fiscal years ending on or after June 30, 2019. The requirements become effective for audits of all other companies to which the CAM requirements apply1 for fiscal years ending on or after December 15, 2020.

For more detail about these and other issues, see KPMG's Quarterly Outlook, KPMG’s SEC Issues & Trends: 2019 AICPA Conference on Current SEC and PCAOB Developments and the Board Leadership Center’s On the 2020 audit committee agenda.

1 The communication of CAMs is not required for audits of emerging growth companies; brokers and dealers; investment companies other than business development companies; and employee stock purchase, savings and similar plans.

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

12

On the 2020 nom/gov committee agenda

The nominating and governance (nom/gov) committee agenda for 2020 needs to be sharp, focused, and executed with resolve. In our annual message for nom/gov committees, we identify seven items for committees to keep in mind as they consider and carry out their agendas.

Here, we highlight three. For the complete list, visit read.kpmg.us/nomgovagenda.

– Focus on board composition, prioritizing diversity and alignment with strategy.

– Consider whether the board’s committee structure brings focus to the issues most critical to the company’s success.

– Conduct rigorous assessments to drive continuous improvement in board and individual director performance.

– Update the approach to new-director onboarding and continuing director education.

– Review and enhance the efficiency and relevance of board operations and policies.

– Develop succession plans for committee chairs and the lead director.

– Encourage robust disclosure regarding issues that are top of mind for investors.

Focus on board composition, prioritizing diversity and alignment with strategy.

Effective board governance begins with the composition of the board, and the stakes are high. The average board turnover rate of only 0.88 new directors per year1 suggests that a fresh look at board composition should be a priority for 2020. Consider a clean-sheet approach: Begin with a skills matrix without reference to who currently serves on the board, outlining the skills, experience, decision-making styles, mix of tenures, and demographic backgrounds that would best align with the company’s strategy and future needs. If current board composition does not match this ideal matrix,

develop a plan to move toward it. Strong leadership from the nom/gov committee is needed, and setting expectations up front and clearly linking renomination to future needs can help to avoid any potential stigma associated with stepping off of a board.

Diversity is a critical component of board composition. Given the business case for diversity, it continues to be top of mind for nom/gov committees as stakeholders increase pressure on boards to make improvements. Expectations for gender diversity continue to move from interest to action, including institutional investors adopting policies (and proxy advisors issuing recommendations) to vote against the nom/gov committee chair or all committee members when progress on board gender diversity is lagging; state laws considering—and in some instances implementing—board diversity reporting requirements and/or mandates; and the federal government holding hearings, among other activities. Keep an eye on California—as of December 31, 2019, all covered companies are required to have at least one woman on their boards, and two factors are in play: companies are gearing up for heightened requirements2 and the law has been challenged in court by two lawsuits as of the date of this publication. Other state laws and pending bills, such as the one passed by the legislature in New York, require reporting on the gender makeup of the board.3

In addition to gender,4 expectations are growing for increased racial and ethnic diversity in the boardroom. The calls for disclosure of board diversity continue to increase among investors, and a new law requires boards of companies with principal executive offices in Illinois to report board gender and race/ethnicity (based on self-identification) by the end of 2020. And as leading board-diversity organizations work to enhance and highlight the pipeline of qualified female, African American, Latino, Asian, LGBT+, and other diverse candidates, stakeholders (including employees as well as investors and regulators) are becoming less tolerant of all male and/or all-white boards.

Directors Quarterly | January 202012

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

13January 2020 | Directors Quarterly

Consider whether the board’s committee structure brings focus to the issues most critical to the company’s success.

How is the board’s committee structure calibrated to handle the growing complexity of board oversight? Does the committee structure enable the board to bring the right focus and attention to those issues that are most critical to the company’s success and long-term value creation? Are there gaps? Is the workload balanced? Nom/gov committees should consider whether important emerging issues are receiving the right level of focus within the existing committee structure, or whether a new board committee would be helpful, either as a standing committee or as an ad hoc committee with a sunset date. Consider how the committee structure can support the board’s oversight of issues relating to data governance, such as protection of privacy and ethical collection and use of data. Also consider the growing discussion about companies’ accountability to stakeholders as referenced in the August 2019 Business Roundtable Statement on the Purpose of a Corporation. Corporate purpose is a nuanced issue that should be discussed by the full board, and the nom/gov committee can play a key role in assuring that the critical issues that roll up to this discussion—environmental issues, employment practices, and ethical and sustainable supply chains, to name just a few—are aligned to appropriate committees for oversight.

According to Spencer Stuart, S&P 500 companies have, on average, 4.2 standing committees. Aside from the three mandatory standing committees, the most common committees established by S&P 500 boards are executive (30%), finance (30%), risk (12%), science and technology (10%), and environment, health, and safety (10%).5 Of course, there is no “right” number of committees. Standing committees can help bring the right focus and attention to critical issues; however, an overly complex committee structure poses the risk of a balkanized board environment where no one has the big-picture view of the company’s strategy and risks. The key is for the nom/gov committee to take a thoughtful look at the committee structure.

Conduct rigorous assessments to drive continuous improvement in board and individual director performance.

Perhaps not surprisingly, enhancing board and individual director evaluations now ranks as one of the top five priorities for nom/gov committees in the next three years.6 If the board has not already defined its expectations for individual directors, this is a good place for the nom/gov committee to start, by creating a detailed director role description outlining responsibilities, performance standards, and expectations inside and outside the boardroom. Expectations should be clear not only as to preparation for and attendance at meetings but also that each director must become a student of the company and its strategy. While it’s management’s role to educate the board about the competitive environment and the implications for strategy, directors need to take control of their own education—reading, visiting facilities, and experiencing the business firsthand—to make sure they understand the strategy and its risks. Reaching a collective understanding of what the board expects from its members can help set the tone for a high-performing board and form the basis for individual director evaluation and action in the future.

As a matter of best practice, board, committee, and individual director evaluations should periodically be undertaken by an independent third party who conducts one-on-one interviews with directors and senior executives and provides benchmarking against peers. Some boards find it helpful to take a deep dive on a particular area—e.g., CEO succession, oversight of disruptive risk, or oversight of talent development—in addition to the standard board assessment. And, of course, follow-through—particularly if removal of an underperforming director is called for—is critical and a test of board leadership.

Find the full On the 2020 nom/gov committee agenda at read.kpmg.us/nomgovagenda.

1 Spencer Stuart, 2019 U.S. Spencer Stuart Board Index (2019) p. 4.2 By December 31, 2021, boards of listed companies with principal executive

offices in California with five directors will be required to have at least two women and boards with six or more directors will be required to have at least three women.

3 At the time of publication, N.Y. bill S4278 had not been delivered to the governor for consideration. Similar laws have been passed in Illinois and Maryland. Mandates are under consideration in Michigan and New Jersey, and a disclosure bill has been passed by the U.S. House of Representatives.

4 For more insights on building diverse boards, see the 2019 WCD Thought Leadership Commission Report Diversity in the boardroom: Pushing forward, reaching back (2019).

5 Spencer Stuart, 2019 U.S. Spencer Stuart Board Index (2019) p. 26.6 Ibid, p. 37.

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Getting strategic on environmental, social, and governance issues

BLC: Most companies initially see ESG issues as compliance or reputational risks to be managed. What was it that pushed McDonald’s view of ESG issues from a set of risks to opportunities for value creation and long-term performance?

Langert: At McDonald’s, we were guilty for the longest time of the same “let’s stay out of trouble” and short-term mind-set. Years ago, one of our key leader’s mandates was for McDonald’s “to get caught doing good.” Some of this was truly due not to tooting our own horn but to fear of opening Pandora’s box, and inviting criticism of our company in some other corner. After all, no company is a perfect corporate citizen.

The opportunity side began to surface as the company studied the ongoing metrics for Brand Health. Half of the 40-plus attributes were long term and CSR-related, such as environmentally responsible packaging, concern for kids’ well-being, treatment of people, supply chain sustainability, and concern for societal issues. For each one, McDonald’s was perceived poorly.

McDonald’s market research experts showed how a 1 percent improvement in Brand Health could deliver 2 percent growth in sales. The catch was that it takes a three-to-five year timespan. In general, our system historically desired sales tomorrow, not five years hence. So our $2 billion annual marketing dollars were spent for short-term benefit.

The solution was right in our face for many years. Success spoiled any solution. We were serving a growing customer base, 60 to 70 million customers a day. For a decade straight from 2002 to 2012, McDonald’s same-store sales were increasing month by month. Why change?

There were many reasons for the McDonald’s business crisis that hit in 2012 and escalated the following couple of years. Addressing Brand Health was part of the turnaround effort. The emphasis on Brand Health was the primary driver for creating and implementing an overarching CSR strategy. By 2014, we defined what

A senior sustainability advisor for The Context Network, Bob Langert spent over three decades at McDonald’s Corp., where he retired as vice president for sustainability in 2015. In The Battle to Do Good (2019, Emerald Publishing), Langert recounts his journey as a

sustainability leader, including triumphs and some bumps in the road. In a Q&A with the KPMG Board Leadership Center, Langert offered insights for directors and management on addressing environmental, social, and governance (ESG) issues.

KPMG Board Leadership Center (BLC): In your book, each chapter includes insights or “nuggets” you learned from the hard knocks you experienced along McDonald’s ESG (corporate social responsibility (CSR)/sustainability) journey. Of all those hard knocks, which ones were the hardest?

Bob Langert: I always thought during my 30-year sustainability tenure, and I still believe today, that the practice of not proactively handling emerging social and environmental issues is a major flaw throughout the business world. Time and time again, companies prove that it’s wait, wait, wait for the crisis. Then the company leaps in, galvanized with orders from on top to solve it. Time is crunched. Science is discounted. There’s a rush to placate public pressure. Excessive costs are incurred. The brand is tarnished. And the solution is most often temporal and half-baked.

We played defense for the longest time at McDonald’s. We let others define what we stood for. The solution is for the C-suite to get strategic about CSR. Create the purpose/mission that is right for your company. Set goals and measurements that make sense, too. I am not saying this part is easy, but it sure beats spinning wheels due to the whims of external stakeholders, which include those interested in collaboration and those looking to tear you apart.

Directors Quarterly | January 202014

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15January 2020 | Directors Quarterly

we stood for and set goals best for our business and society by integrating a 2020 Sustainability Framework. The reactive battle came to an end! Since I retired in March 2015, this framework has exponentially evolved.

BLC: Like other name brands, McDonald’s set ESG goals for itself that were clearly bold. Do ESG efforts necessarily need to be bold, or can incremental progress work just as well?

Langert: Whether you pick small steps or big steps is secondary. Getting started with a proactive, integrated, C-suite-driven approach on ESG is the key. Companies without their own plans might claw forward and thrive for a while, but lagging will leave them behind. The risk of being complacent is far greater than being proactive.

I highly recommend incrementalism. I know the ESG activists want audacious targets, but not every company can be a Walmart or a Unilever. Many of the big changes we made at McDonald’s started small, got pilot tested, and expanded slowly to ensure we were doing it right. Sustainable fish was that way. We created a partnership with Conservation International. They worked with our fish suppliers to develop a scorecard that slowly was put to use. Trust was gained. After 10 years of incremental advances, by 2013, all fish for McDonald’s worldwide was Marine Stewardship Council certified.

BLC: Terms like “climate change” and “social responsibility” can easily fall flat in a boardroom conversation about corporate performance and profitability. How did you frame the strategic importance of ESG activities for different stakeholders, including McDonald’s leadership, franchisees, and investors?

Langert: We used business terminology, not ESG/CSR terminology. For instance, we framed our work to franchisees as all about reducing their energy costs, and even though the societal benefit was related to climate change, we did not use that language since it can be divisive. The 2020 Sustainability Framework we developed was headlined: “Growing our business by making a positive impact on society.” This big idea that doing good is actually good for business was a sea change for us.

Our culture always looked at doing good through an ethical/values lens. I would go to meetings about tough environmental issues and the question first asked was, “What’s the right thing to do?” That’s important, but it is not a strategy. We eventually adopted a 2020 CSR & Sustainability Framework formulated on a thorough business case. The business case will vary by company but can include improvements to brand and reputation, supply chain resilience, cost savings, employee recruiting/retention, innovation, and more. McDonald’s instituted an environmental scorecard for its primary

suppliers that measured water, waste, and energy usage and costs—and we showed annual savings in the $30-to-$40 million range.

BLC: ESG encompasses many issues, but we’re finding that social issues—the “S”—are particularly challenging for companies to address. Any words of wisdom for boards to help them get their arms around the “S”?

Langert: I would replace “social” with “shared value.” Stressing “social” does seem like an improper stretch for a company. But if a company says it is committed to delivering shared value for both business and society, then company management can be more at ease and work on the social and environmental issues most germane to their own business success while helping to solve an important society issue as well.

For example, McDonald’s didn’t set a goal to purchase sustainable beef simply to do good. We had $5 billion beef brands. Beef was getting attacked on several sustainability fronts and becoming less relevant to consumers. We decided to collaborate with the beef industry and NGOs to develop sustainable beef principles and standards in order to sell more beef.

BLC: Ask and answer your own question for directors and senior corporate leaders regarding corporate sustainability programs and initiatives.

Langert: Why are you holding back on making ESG an important driver for business success?

We are in the midst of a major conversion when it comes to companies’ relationship with society. For the past 25 years, the primary approach was risk aversion, laying low. CSR was but a do-good thing on the peripheral of the core business, important only when a crisis occurred.

That approach no longer works. From now on, successful companies must see CSR as central to their business. The best companies will successfully locate and navigate through the intersection of doing good for society while helping their business prosper. Business and capitalism need both a good financial bottom line and a responsible societal bottom line.

Read more on ESG issues at kpmg.com/us/boardleadershipcenteresg.

The views and opinions expressed herein are those of the interviewee and do not necessarily represent the views and opinions of KPMG LLP.

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

16 Directors Quarterly | January 2020

Mark your calendar

About the KPMG Board Leadership CenterThe KPMG Board Leadership Center champions outstanding governance to help drive long-term corporate value and enhance investor confidence. Through an array of programs and perspectives—including KPMG’s Audit Committee Institute, the WomenCorporateDirectors Foundation, and more—the Center engages with directors and business leaders to help articulate their challenges and promote continuous improvement of public- and private-company governance. Drawing on insights from KPMG professionals and governance experts worldwide, the Center delivers practical thought leadership—on risk and strategy, talent and technology, globalization and compliance, financial reporting and audit quality, and more—all through a board lens. Learn more at kpmg.com/us/blc.

WCD 2020 Americas Institute, Miami, FL February 10–11

Join corporate directors and C-suite executives from the U.S., Canada, and Latin America to discuss the latest trends impacting the boardroom today, with a focus on how culture, ESG, and technology are radically changing board agendas.

For more information, visit www.womencorporatedirectors.org.

NACD Master Class, Miami, FL March 5–6

Designed for experienced lead directors, board chairs, and committee chairs with five or more years of experience on a public company board, NACD’s Master Class includes peer-to-peer discussion, fireside chats with prominent CEOs, interactive simulations, and analysis of rapidly emerging disruptions affecting business strategy and long-term value creation.

Request an invitation at www.NACDonline.org.

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

KPMG Board Leadership Center Webcast January 16,11 a.m.–12 p.m. (EST)

Join us for a one-hour webcast featuring Ken Kim, senior economist for KPMG LLP, and Susan Angele, senior advisor, KPMG Board Leadership Center, who will discuss the outlook for the U.S. and global economy this year, including trends and challenges shaping corporate growth, employment, trade, and the general operating environment amid political and market volatility around the world.

To register, visit watch.kpmg.us/BLCwebcast.

NACD from Battlefield to Boardroom, Washington, DC February 19–21

Join KPMG at NACD’s development program designed to prepare retired and soon-to-retire military flag and general officers for board service. Topics range from boardroom basics to more complex issues of strategy, oversight, and stakeholder management.

For information and to request an invitation, visit www.NACDonline.org.

Selected reading2019 U.S. Spencer Stuart Board Index Spencer Stuart

Ten key regulatory challenges of 2020 KPMG LLP

What companies that are good at innovation get right Harvard Business Review

2019 Edelman Trust Barometer special report: Institutional Investors Edelman

How to cultivate a corporate strategy to serve all stakeholders Boston Consulting Group

To receive articles like these from Board Leadership Weekly, register at kpmg.com/us/blcregister.

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

Contact uskpmg.com/us/blc T: 1-800-808-5764 E: us-kpmgmktblc@kpmg.com

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