There are several emerging trends in board governance in Canada. These trends include:
- Increased focus on sustainability and ESG: Boards of directors are increasingly focused on sustainability and ESG (environmental, social, and governance) issues. This is due to a number of factors, including growing shareholder demand, regulatory pressure, and changing consumer preferences. Boards are developing and implementing ESG strategies, and they are reporting on their ESG performance to shareholders.
- Greater board diversity: Boards of directors are becoming more diverse in terms of gender, race, ethnicity, and other factors. This is due to a number of factors, including the recognition that diversity of thought and experience can lead to better decision-making. Boards are adopting policies on board diversity and are taking steps to recruit and retain diverse board members in order to better reflect the communities they serve.
- Enhanced boardroom refreshment: Boards of directors are becoming more proactive in refreshing their boards. This means that boards are identifying and replacing directors who are no longer contributing effectively. Boards are also setting term limits for directors.
- Increased board engagement with shareholders: Boards of directors are becoming more engaged with shareholders. This is due to a number of factors, including growing shareholder activism and the increasing availability of shareholder data. Boards are holding more regular meetings with shareholders, and they are providing more information to shareholders about their governance practices.
- Use of technology: Boards of directors are increasingly using technology to improve their governance practices. This includes using technology to conduct board meetings remotely, to share information with board members, and to manage board documents.
These emerging trends are likely to have a significant impact on board governance practices in Canada in the years to come. Boards of directors that are not prepared for these trends may find themselves at a disadvantage.
Boards of directors can prepare for these trends by:
- Developing and implementing ESG strategies
- Adopting policies on board diversity and refreshment
- Engaging more proactively with shareholders
- Using technology to improve governance practices
By taking these steps, boards of directors can help to ensure that they are meeting the evolving needs of their companies and their shareholders.
This article is for informational purposes only and is not legal advice. Contact us today to discuss your specific situation.