This month we decided to see what The Chartered Governance Institute and Core communities thought about the third lockdown, as well as what the biggest governance focuses for 2021 are likely to be.
When asked whether the most recent lockdown has caused any new policy changes in the company, the majority said no at 74%, and when asked how significant on a scale of 1-10, with 1 being not at all and 10 being very significant, the third UK lockdown has had a further impact on the organisation that they work for the majority indicated a ‘3’ at 19%.
We also asked the respondents what some of the biggest governance focuses for 2021 will be; the answers were varied. “How to maintain standards with fewer resources and lower budgets will be an issue but not the biggest. I think that if we learn anything from the impact of COVID on governance, it should be about which aspects are necessary and which have, during lockdown, proven to be a waste of time” one said.
Another said: “The greatest focus is likely to be financial, be that in relation to the impact of Brexit or the pandemic, particularly the concept of prudence. This may need to result in greater focus on financial systems and controls and reduction in risk appetite. There may also be a focus on Directors’ remuneration/bonuses in response to greater scrutiny from shareholders who will have been hit hard by the recession” and another: “A review of our board committees and working groups to align better with our organisational objectives and of our meetings’ pattern–online meetings offer us great flexibility. Introducing a board review process”.
Environmental, social and governance (ESG) was also mentioned frequently by respondents with participants 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”, “ESG/climate change. Virtual AGMs. Remuneration matters – director pay, remuneration policy, bonuses”, “the intense focus of investors on ESG”, “Climate change. Although COVID is still having an impact, it will not be viewed as something which takes precedence over everything else”, “External effectiveness review; ESG and corporate social responsibility” and “Remuneration and diversity and especially climate change and ESG”.
Other answers included: “Succession planning”, “Ongoing board oversight of culture, remote stakeholder engagement/external and remote board evaluation”, “Board and corporate responsibility for financial resilience and sustainability” and “Risk and security for working in a continued remote fashion”.
Poignantly one respondent said: “Building COVID learnings into the new normal. Last year we could make changes as a one-off due to exceptional circumstances. Now those exceptional circumstances have become the new normal and BAU needs to reflect that”.
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