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Forum Views - Aug 2024

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FORUM VIEWS - AUGUST 2024

y focusing on governance, brokers can not only mitigate

risks but also enhance their reputation and attract more

Binvestors. Join us as we explore critical questions and

insights to help you elevate your governance standards.

Key governance indicators include board independence,

diversity, expertise, tenure, meeting attendance, committee

structures, and executive compensation policies. You should

also consider the separation of CEO and Chair roles, the

presence of a lead independent director, and the board's track

record in strategic decision-making and risk oversight.

Emphasize the benefits of long-term investing by presenting

historical data on sustainable companies' performance,

explaining the risks of short-termism, and showcasing case

studies of successful sustainable businesses. Structuring

investment portfolios to align with clients' long-term goals and

values can also be very effective.

Highlight companies with strong R&D investments in

sustainable technologies, innovative business models

addressing sustainability challenges, and effective adaptation

strategies. Educating clients on the long-term value creation

potential of such innovation and the risks of failing to adapt to

sustainability trends is crucial.

Assess board quality by analyzing the skills matrix,

independence, diversity, and tenure of directors. Evaluate the

1. What are the key governance indicators I should

consider when evaluating a company's board structure and

effectiveness?

2. How can I encourage my clients to consider long-term

sustainable value creation over short-term gains?

3. What role do we, as stock brokers, play in promoting

corporate innovation and adaptation to sustainability

challenges?

4. How can I effectively evaluate the quality of a

company's board of directors and its impact on corporate

strategy and performance?

board's involvement in strategy formulation, its oversight of

management, and its responsiveness to shareholder concerns.

The frequency and quality of board evaluations and succession

planning are also important indicators.

Divya Momaya

Founder

MentorMyBoard

GOVERNANCE

5. What strategies can I use to encourage companies to

improve their ESG performance and disclosure?

6. How can I stay updated on the latest developments in

board governance and sustainable development?

Engage directly with company management, support

shareholder resolutions on ESG issues, and collaborate with

other investors to promote best practices. Use your voting

power to influence corporate behaviour and communicate

client expectations regarding ESG performance and disclosure.

Engage in continuous learning by regularly reading industry

publications, attending relevant conferences and webinars,

Client education on the relevance and

potential impact of ESG factors is also

necessary, requiring brokers to adapt

their analytical approaches,

potentially upskill, and balance ESG

considerations with traditional

financial metrics and client goals.

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