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Recent sustainability and integrated reporting developments

Mar 17, 2020

A summary of recent developments from the Climate Disclosure Standards Board (CDSB), the Carbon Disclosure Project (CDP) and the Sustainability Accounting Standards Board (SASB).

The CDSB and the CDP have jointly released an environmental reporting handbook to help companies improve their disclosure in line with the EU Non-Financial Reporting Directive. The EU Environmental Reporting Handbook helps companies learn from their peers to better understand how to report in line with the Directive. Review the handbook on the CDSB's website.

The SASB launched the SASB Implementation Primer, an online resource for companies seeking to incorporate SASB standards into their core communications with investors. Review the press release and implementation primer on the SASB's website.

What are the business benefits of practicing strong cybersecurity?

Mar 09, 2020

On March 9, 2020, the Board Effect released a blog on how advanced technology has brought many solutions for businesses. At the same time, it’s created greater potential for criminals to engage in cyberattacks.

Cyberattacks have become so commonplace that it’s becoming one of companies’ highest priorities. In fact, about 40% of companies claim that cybersecurity is and will continue to be the top priority in their budget allocation for technology reporting. With almost one-third of businesses in the U.S. have suffered a data breach, companies are realizing that they need to do more than address cybersecurity issues on the technical end. It’s equally important to build a cybersecurity culture among the employees. That’s because human error is the top cybersecurity risk in the workplace.

Review the full blog on the Board Effect's website.

Global Ethics Board releases report exploring the ethical implications of technology for accountants

Feb 27, 2020

On February 27, 2020, the International Ethics Standards Board for Accountants (IESBA) released its Phase One Report exploring the ethical implications of technology on the accounting, assurance, and finance functions.

The report is the culmination of the first phase of fact-finding work the global ethics standard-setting board initiated in recognition of the pace and magnitude of change caused by disruptive technological innovations. The initial phase of the initiative was led by the IESBA’s Technology Working Group (TWG).

In its findings, the TWG concluded that, generally, the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) currently provides high level, principles-based guidance for most technology-related ethics issues that professional accountants and firms might encounter. However, the report cites various findings and sets out recommendations grouped into five key topical areas where material in the Code could be enhanced.

The report also includes other recommendations for the next phase of the initiative, including that the IESBA conducts additional information gathering with respect to the ethical implications of other technological developments such as blockchain, cybersecurity and Internet of Things.

Review the press release and report on the IESBA's website.

The importance of secure technology in community banking

Feb 26, 2020

On February 26, 2020, the Board Effect released an article on how advancements in technology excite us because they make our lives easier and more convenient. As technology advances and evolves, it gives criminals increasing opportunities to access sensitive information, engage in identity theft, and it poses financial and other risks.

For example, Norton Security states that cybercriminals hit the financial services industry harder than any other industry in 2018 and the few years preceding it. According to consumer reports, there is an increase in identity theft by 400% from 2017-2018. Banks and other financial institutions need to take special care to ensure that they can protect the security and privacy of their customers. Bank boards need to act now to bolster their security policies and practices and continue monitoring their security protocols as the sophistication of cybercrime continues to increase.

Review the full article on the Board Effect's website.

Climate change risk disclosure

Feb 26, 2020

In February 2020, the Governance Institute Australia published a practical guide to reporting against ASX Corporate Governance Council’s Corporate Governance Principles and Recommendation.

Recommendation 7.4 of the new ASX Corporate Governance Council’s Principles encourages entities for the first time to consider and report upon any material exposure to climate change risk. This practical new guide helps you to identify and disclose your climate change risks.

Review the guide on the Governance Institute Australia's website.

Maintaining a high-value board-CEO relationship

Feb 25, 2020

On February 25, 2020, the National Association of Corporate Directors (NACD) released a blog on how achieving that healthy tension in the boardroom—where the board is advising the CEO and management team while maintaining objectivity, independence, and skepticism—has always been a challenge.

Yet, the mounting complexity of the current business environment has placed tremendous pressure on boards and CEOs to deliver results. Rapid technological change and business model disruption, economic and geopolitical uncertainty, and investor demands to hold CEOs and boards more accountable for performance all place possible strains on the board-CEO relationship.

Review the full blog on the NACD's website.

Davos 2020: Stakeholders for a cohesive and sustainable world

Feb 25, 2020

In February 2020, the World Economic Forum (WEF) released an an overview of the global media and digital media coverage throughout January of the World Economic Forum Annual Meeting 2020.

The main story of the Annual Meeting was climate-change action to focus on tackling the urgent issue of climate change by committing to net-zero carbon emissions by 2050 or earlier. This urgency was reflected in new data from the Global Risks Report 2020, which included climate threats as the top five risks since its first edition, and the Nature Risk Rising report, which found that $44 trillion of economic value generation is exposed to nature loss. There was also a focus on the sustainability and to bring together leaders of society to address the world’s most pressing challenges. This has an impact on the environment and is another way of fulfilling the mission to improve the state of the world.

Review the overview on the WEF's website.

IT Governance Checklist

Feb 19, 2020

On February 19, 2020, the Board Effect released a tool that helps with governing information technology. By taking things a step at a time, starting an IT governance checklist, and considering it a work in progress, your board will be well on its way to understanding how it can best tackle the difficult task of overseeing IT governance.

Every year we depend on technology to help us store and manage various types of data for various purposes. Along with that comes the responsibility for managing it appropriately and according to IT governance best practices, which is a relatively new issue for boards to address. The responsibility for overseeing the management of electronic processes falls to the board of directors. This is no small task due the large number of individuals and employees that need to access the organization’s data on a regular basis.

Review the checklist on the Board Effect's website.

Potential D&O risks arising from corporate social responsibility

Feb 04, 2020

On February 4, 2020, the D&O Diary published an article on how the long-standing and traditional view is that corporations’ objectives should be to maximize shareholder value. But more recently, a variety of commentators and observers have argued that corporations have larger social responsibilities. Efforts by companies to fulfil corporate social responsibilities may involve their own risks and even result in D&O claims.

By the same token, failing to take action could result in claims as well. These trends have important implications for insurers and for policyholders alike.

Review the full article on the D&O Diary's website.

Workforce-related corporate reporting: Where to next?

Jan 31, 2020

In January 2020, the Financial Reporting Council (FRC) released a report on their project that sought to test whether the principles of good reporting in their previous reports on business models, risk and viability reporting and performance metrics could be applied in the context of reporting on the workforce.

This project was undertaken alongside their work on climate change. In both of these projects there was a clear desire for reporting around four elements, namely governance and management, business model and strategy, risk management and metrics and targets. As such, the Lab’s insights follow these four elements.

There are examples of developing reporting practice, but further improvements can be expected as regulatory changes and investor expectations develop. To assist, this report sets out how companies can make their reporting more effective and comprehensive by providing a set of questions that they should ask to help develop their reporting.

Review the report on the FRC's website.

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