Let’s face it. Corporate governance continues to become more complex and demanding, the world over. With multinational growth, constant regulatory changes, shareholder activism and investor demands for higher governance standards before they fund, board directorship is a much tougher role today. Increased exposure, accountability, and keeping up on laws and compliance requirements means board members must rely on world-class resource support to do their jobs well. A simple mishap can subject a company to SEC injunctions, ruin a corporate reputation, damage stock value and limit a company’s access to much-needed funds for growth. No board wants these risks on its shoulders.
Further, boards need qualified, trained multi-national talent for new director roles to maintain solid succession planning and to meet both diversity mandates and dynamic governance standards. The average age among board directors -- globally -- exceeds 64: this foretells of a serious gap in talent to meet the needs for board-ready candidates.
Making matters more serious, the rules of the game on financing are changing. Large institutional investors are demanding disclosure on governance as criteria for investment. The largest 300 institutional investors have signed a United Nations accord to include a governance standard as a key criteria for evaluating the investment potential of a company. Companies seeking investment capital for corporate growth from investors must now meet new governance requirements and demands for transparency and disclosure in corporate reporting. Companies and boards that fail to adopt these new evaluation processes will lose the access to capital for growth.
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