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We live in a time of converging crises and existential risk. Managing these risks requires governments, corporations, international institutions, and civil society to achieve unparalleled cooperation. Without more effective collective action, conflict, climate change, inequality, and political disenfranchisement will continue to drive uncertainty, destabilization, and economic fragmentation.
How should corporate directors respond to these disruptions and risks? How should directors think about and plan for the long-term consequences of the war in Ukraine? Will corporate commitments to ESG accountability and disclosure change directors’ outlook and responsibilities? And, how can corporate directors drive stewardship and profitability while responding to the needs of increasingly divergent stakeholders?
The 2022 annual Salzburg Global Corporate Governance Forum examined the role directors play in addressing these converging crises and debate their changing roles and responsibilities in times of fundamental uncertainty. The Forum explored how directors ensure the corporation is not only fit for purpose in difficult times, but how corporations proactively protect and advance its environmental, social, and governance responsibilities under new pressures and public scrutiny. The Forum took place in person for the first time since 2019. Participation in this program was by invitation only.
• What are the key challenges boards face with regard to the rising complexity of ESG oversight? How should boards better steer the transition to dual materiality and understand its impact on the business?
• Is an expanding ESG reporting and disclosure going to lead to more scrutiny and litigation? How
should Boards ensure strong governance around these issues?
• What are the regional perspectives on ESG (Europe, the United States, Asia, Africa)? Do we need to
better align perception with reality?
• How can boards better understand the evolving needs for a broader set of stakeholders? How do diverse stakeholders stand up and enforce their interests? Is it possible to have all the stakeholders who are relevant to specific social objectives?
• How does a strong corporate culture drive performance? How should boards cultivate culture to achieve this? What is the role of the board, senior management, and other corporate roles (HR, PR, compliance/legal) in shaping corporate culture?
• What are the key challenges Boards face when addressing a range of cultural risks ranging from ESG issues to diversity, equity and inclusion, issues around social movements that are demanding more accountability and representation? What are the lessons from specific case studies, such as the Disney Florida case? How should directors respond to external pressure to shift the values and the culture of their company?
• Do regional and sectoral differences in culture impact effective board oversight and corporate governance mechanisms? Should a company operating within multiple societies aim for one unifying corporate culture, or should it have different cultures depending on where the corporation does business and which markets it serves?
• Do the unraveling of post-world-war order and decoupling of Russia from the global economy mean the end of the globalization as we know it? What does this reshaping the global operating environment mean for the boards (for example, the impact of disruptions in global supply chains which have already been beleaguered by the COVID-19 pandemic)?
• Does corporate leadership need to consider new operating models for supply chain management in order to address political fragmentation as well as the new demands for ESG transparency and accountability in supply chains, especially in the drive towards net zero?
• In the light of the war in Ukraine and its repercussions for the global economy, what are the implications of geopolitical events for directors? What can be learned from real-life case studies about the public and investor scrutiny with regard to companies’ strategic decisions about their operations in a complex geopolitical environment (for example, the case of McDonalds in Russia)? How should boards deal with increased expectations for disclosure and accountability around these issues?
The highly interactive discussion took place in plenary and breakout sessions without any preassigned speakers, panels, or formal presentations. Reading materials, accompanied by key questions, have been distributed in advance.
Small group conversations allowed for intense exploration of specific aspects of the general themes,returning to the plenary to refine conclusions.
Adherence to the Chatham House Rule ensured an open and free exchange of ideas among peers.
The Forum is intended to benefit directors and principals of corporations operating in various jurisdictions who want an off-the record opportunity to explore and address some of the greatest challenges facing them as directors in the coming decade.
The aim is to help them return to their boardrooms with new ideas which they can implement, and with new partnerships and insights, so that they can become thought leaders and change makers for the coming decades.