The 2021 agenda of the boards of directors should have among its priorities the continuous response to the crisis caused by the covid-19, without losing the long-term vision of business. This is what the document “Board of Directors: Priorities for the 2021 agenda” says, prepared by the ACI Institute Brasil in conjunction with the Board Leadership Center, both linked to the KPMG consultancy.

With the objective of assisting counselors to outline strategies to deal with the crisis successfully, the document cites several topics that should be high on the agenda of the collegiate bodies this year – such as the ESG agenda, risk management, capital management engagement with shareholders, among others.

According to Sidney Ito, CEO of the ACI Institute and a partner in Risk and Corporate Governance Consulting at KPMG, the moment is for the transformation of the business model, with more and more technology incorporated into the operations. He says that is why it is so important that counselors maintain their concerns about the long term.

“If there is no concern with technological changes, in the future the company may not even exist or be far behind its competitors, which are being transformed. It is important to have a balance between taking care of the day to day and the crisis itself and also not losing focus on the long term, on strategic planning and especially on the transformation of the business model ”, he explains.

In addition to the focus on combating the crisis and the long term, the KPMG partner comments on some of the other points brought by the document as priorities for the boards of directors in 2021. “Assess whether your 2021 agenda addresses these items. It is obvious that there are other priorities for each company, but, in my understanding, the directors must at least assess whether these items should be part of their agenda or not ”, he says.

One of the topics in the document, human capital management was in evidence during the pandemic, as was the talent development plan for companies. There is even a greater demand from investors for more transparency in relation to how the company is positioned to attract, develop and retain the best professionals.

For Ito, the transformation of the business model also requires the transformation of human capital itself. “People are not going to continue doing the same thing, they are going to do different things and act differently. There is artificial intelligence, digitalization, internet of things, all of which interfere with the performance of professionals. The profile of the professional will already be different in this transformation ”, he says.

“The company must be prepared. It is no use thinking only about hiring people with this profile, because if everyone thinks about doing this, there will not be enough people. The point is to develop professionals, retain talents ”, advises a KPMG partner.

The executive adds that there must also be a succession plan for the CEO, as the company’s president must be aligned with the new responsibilities related to a new business model. “I have to retain the CEO I already have or think about succession with a candidate already with that profile,” he says.

ESG, an acronym that refers to environmental, social and governance issues, has been gaining ground in discussions by boards of directors in recent years, which has been accelerated by the pandemic.

“ESG is no longer a corporate discussion, but something more than an institutional one, to be a requirement of people, of the community”, says Sidney Ito. “It can’t be a fad or an exclusive action by the president or an area of the company, it has to be rooted in the company.”

Another topic that should be treated as a priority by the councils, according to KPMG, is to question whether the company is doing enough to combat systemic prejudice and racism. The document states that “communities, employees, customers and investors are calling on companies to promote lasting change, turn words into actions and demonstrate measurable progress.”

Ito highlights another aspect, within the technological disruption of business: care must be taken to train artificial intelligence, so that decisions made from them do not reflect prejudices. “There may be a prejudice that makes artificial intelligence make decisions or conclusions derived from the past that do not necessarily represent reality,” says the executive. “It is necessary to ensure that this does not happen. And, if the company has any prejudice, it will affect its image, so the board has to ensure that there is this concern ”, he adds.

Building a board that represents the company’s strategy and needs is another topic in the document, which highlights diversity as a path to more efficient boards. “If I don’t have a well-balanced board in terms of gender, people, skills, age, I may not be able to make the best decisions, the best solutions, the best strategies,” says Ito.

According to Ito, in the midst of the crisis caused by the pandemic, the very creation of crisis committees or crisis plans to face the effects of the covid-19 made companies better understand the importance of risk management, which also appears as a matters that should be a priority for councils this year. “Today, all boards have placed risk management on their agenda,” he says.

Still in the area of risks, another priority concern for 2021 is the approach to cybersecurity and data privacy in a holistic way. “What has changed over the years has been the information getting off the ground and becoming more and more electronic. Now with the General Personal Data Protection Act (LGPD) and hackers trying to break the cybersecurity of companies, there is a concern about not having my data leaked and not failing to comply with the law because I will be punished. There is also pressure from stakeholders (investors, customers, employees, suppliers and the community in general) here, which makes the topic a priority for the board ”, explains Ito.

Investor relations must also be a priority for the board, which must be proactive. Ito points out that the company has social responsibilities, but it also needs to make a profit and serve its own shareholders. “It is necessary to be proactive to understand the demands of both shareholders and other stakeholders, to reach a balance between all to serve them and to be successful in devising strategies according to the company’s objectives”, says the KPMG partner.

The action to monitor corporate culture should also not be left out. “The council has to set the tone. He has to monitor, he has to punish those who do not do the right thing, he has to create a corporate culture and ensure that this corporate culture is maintained. The responsibility is not just to put all these items on the agenda, but to ensure that all of this works ”, concludes Ito.

Click here to read the full document released by KPMG.

By Heloísa Scognamiglio, O Estado de São Paulo. Published on 11/02/2021.