Covid-19 pandemic accelerates emerging trends in corporate governance
The Covid-19 pandemic has accelerated some trends which were already emerging in corporate governance, according to EY partner Vickie Wall, who recently completed the UCD Smurfit School diploma in corporate governance. “There is growing acknowledgement by boards of the need to consider the views of wider stakeholder groups,” she says.
“Boards have had to navigate through an unprecedented time, and they are asking if their organisations’ business models are set up to be successful in the new world. They are also looking at board composition. They are asking if they have got the right people and the right level of diversity.”
Environmental, social and governance (ESG) factors are also becoming more important for boards. “That’s very encouraging,” says Wall. “There is now far greater appreciation of the fact that ESG factors can have an impact on long-term success. They are looking at those success factors and putting targets and key performance indicators in place for them.”
Wall’s direct involvement with corporate governance goes back several years. “I joined EY in 2014 to set up the EY Global Reporting Centre of Excellence and before that I was in a role where I worked closely with boards following the introduction of the 2012 Corporate Governance Code.”
Her role with the EY Global Reporting Centre of Excellence, which now works with more than 50 of the largest Fortune 500 companies worldwide, sees her specialise in helping large multinationals transform their global statutory reporting process through more effective use of automation, robotics and a globally integrated delivery model.
“I wanted to do the Smurfit course on corporate governance for a long time but my work with the centre of excellence meant I spend quite a bit of time travelling abroad to meet clients and there was no prospect of me doing it in normal circumstances. Covid meant I couldn’t travel and allowed me to do the course. In hindsight I couldn’t have chosen a better year, considering what boards have had to face during these unprecedented times.”
The pandemic brought particular challenges. “Boards were forced to make some really hard decisions regarding business model changes, the workforce, and many other areas. Many boards never had to face these challenges before,” Wall says.
The Smurfit course offered some interesting perspectives on these challenges. “The people on the course came from very varied backgrounds,” Wall notes. “There were people from professional services organisations. There were people from public sector bodies who brought some really interesting perspectives on the different stakeholder groups they deal with and the ways they have to operate. There was also a number of CEOs with their own business who may have been thinking about moving into a chairman’s role. There were also some individuals from investment houses, and they also brought an interesting perspective on what’s going on.”
One very topical issue which came up for discussion was the role of members of boards of charities. “People join the boards of charities to do good and need help when it comes to corporate governance,” says Wall. “The governance code introduced by the Charities Regulator will help guide them. It will also improve the public perception of charities.”
She also has high praise for the Smurfit faculty. “The lecturers are outstanding. Their knowledge of their different subject matter areas and passion really comes through. All the lecturers are at the forefront of their fields.”
Another topical area covered by the course is the skills directors need to deal with changing times. “You need a different type of person to lead in new times and deal with such a rapid pace of change. Directors need resilience and agility, an ability to reflect and bring different perspectives to the board. They also need to be able to challenge.”
Wall points out that some boards are made up of directors from very similar backgrounds and this lack of diversity can be detrimental to decision-making.
“It can sometimes stray into groupthink because of the make-up of the board. There is greater appreciation now that more challenge leads to better decisions. But you need to have a chair that facilitates and encourages debate and challenge. And you need diversity – of gender, background, experience, ethnicity and so on. That’s what helps companies deal with new and difficult situations. Boards need to take stock and look at how they fared as they managed their way through the crisis. It is vitally important to be able to learn from what has and hasn’t gone well.”
And her advice to others considering the UCD Smurfit School diploma in corporate governance? “It’s a big time commitment but it is very worthwhile. It was an invaluable learning experience.”
This article was written by Barry McCall and first appeared in The Irish Times, 20 May 2021. Photo courtesy of The Irish Times.