NACD (National Association of Corporate Directors)

Baker Tilly and NACD: 2021 Governance Outlook

Projections on Emerging Board Matters

Baker Tilly and the National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 20,000 board members, released the 2021 Governance Outlook: Projections on Emerging Board Matters, featuring Baker Tilly’s 2021 Strategic Risks for Boards. The outlook is designed to give corporate directors and senior executives a comprehensive overview of major business and governance issues likely to demand board focus over the coming year.

Baker Tilly’s 2021 Strategic Risks for Boards focuses on three key risks facing organizations resulting from challenges of the COVID-19 pandemic, including questions directors should ask themselves.

Financial resiliency

• Is our strategy still appropriate considering all that we have already experienced and our projections for 2021?
• Do we need to consider mergers and acquisition (M&A) targets, divestiture of certain business units, or layoffs or furloughs, not only from a strategic perspective but also with an eye toward reputational risk?
• Does the organization have the appropriate capital structure and resources to execute its plans?

Supply chain

• Do we as the governing board have a clear picture of all supply-chain tiers to ensure resiliency?
• What measures have the organization's leaders put in place to ensure that the business is not affected in the same manner if a systemic disruption happens in the future?

Workforce issues

• Does the organization have the right talent-management system in place, including up-to-date talent profiles, to support any changes to the work-force that may be necessary to handle a COVID-19–type situation in the future?
• What did we learn from the pandemic slowdown in terms of hiring practices and flexible work arrangements that should be permanently incorporated into the HR strategy?

The report also highlights NACD survey findings about leading board priorities for 2021.

Baker Tilly – NACD BoardTalk blog article:

Evolve Risk-oriented Roles and Their Effectiveness Using the Three Lines Model

No matter the size or industry, every organization manages risk and pursues compliance to some extent—but how effectively? The Three Lines Model helps leadership, including boards of directors, see the delineation of roles and responsibilities along the “three lines”: day-to-day management, risk oversight and monitoring functions, and risk assurance-oriented functions, such as internal audit. It also provides a customizable framework upon which to build your organizational understanding of and approach to risk management and monitoring functions.

Baker Tilly – NACD BoardTalk blog article:

Directors Talk Post-Breach Processes

After a cyber breach, it’s too late for “should haves”—but there’s still a chance for your company to respond quickly and appropriately to mitigate reputational and regulatory fallout. A recent roundtable cohosted by NACD and Baker Tilly in Chicago discussed specific post-breach considerations that boards should plan for include:

• ­Escalation
• ­Public response
• ­Regulatory restraints
• ­D&O insurance
• ­Ask questions