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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