Welcome to the Boardroom Governance Podcast. I’m your host, Evan Epstein. In this episode, I talk with Susan Angele and Stephen Brown, both Senior Advisors of the KPMG Board Leadership Center. Susan is a frequent writer and speaker on board governance topics, including strategy, risk, culture, the corporation’s role in society, and board composition and effectiveness. She is a lawyer and former Fortune 500 executive, with 25+ years in the consumer products industry, including roles as Vice President, Global Deputy General Counsel, and Chief Governance Officer at The Hershey Company, and Chief Counsel, US Snacks at Mondelez (then a $5 billion division of Kraft/Nabisco). Stephen advises business leaders on key governance challenges, including shareholder activism and engagement, board composition, ESG risks and strategy. Formerly, he was CEO of the Society of Corporate Governance and led the corporate governance group at TIAA/Nuveen. Prior to TIAA, Stephen practiced securities law at WilmerHale and Skadden and was an associate with Goldman Sachs. In this podcast, we talk about director onboarding insights, board diversity trends, board oversight for climate change, lessons from the 2022 Proxy Season on the ESG front, and the increasing politicization and polarization in corporate governance. We also address the so-called new era of “shareholder democracy” with large institutional investors passing through voting power to beneficial owners. Finally, they provide recommendations for current directors and executives seeking to start their board careers. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. You can find all the show notes on the website boardroom-governance.com and please feel free to subscribe to the Boardroom Governance Newsletter at evanepstein.substack.com
0:00 -- Intro.
2:09 -- Start of interview.
2:54 -- Susan's "origin story".
4:18 -- Stephen's "origin story".
6:24 -- The origin and mission of the KPMG Board Leadership Center. It started with the Audit Committee Institute in 1999.
12:12 -- The progress on board diversity and onboarding insights for new directors. Example: Board Readiness Program from LCDA. "Two important elements for new directors to think about: 1) to deeply understand the role of the board and how that differs from management, and 2) to deeply understand what the company needs and what is the value that the director adds that no one else either on board or management is currently providing."
14:07 -- The path to the board and director performance. In Fortune 500 companies and beyond.
19:19 -- Board oversight on climate change. In this NACD’s Governance Challenges report, Susan Angele offers areas for focus and questions to consider as boards enhance their governance to integrate climate change issues into risk, strategy, culture, values, and relationships with stakeholders.
24:54 -- On whether "climate change" experts will be recruited for corporate boards.
27:53 -- Lessons from the 2022 Proxy Season on ESG. To help boards understand and shape the total impact of the company’s strategy and operations externally—on the environment, the company’s consumers and employees, the communities in which it operates, and other stakeholders—and internally, on the company’s performance, KPMG offers a five-part framework: 1) Level Setting, 2) Assessment, 3) Integration, 4) Stakeholder Communications, and 5) Board Oversight.
31:48 -- On the "anti-ESG" trend. "You have to recognize the political play on this."
36:15 -- How should CEOs and boards approach the "S" in ESG, particularly regarding employee and social matters. From Edelman data: "Employees really want to be engaged in these issues."
42:38 -- On BlackRock (and other institutional investors) stating that a new era of “shareholder democracy” is coming with technology increasing voting power and expanding voting choice for investors (see BlackRock's Voting Choice). Thoughts on this trend: "this is an issue of concentration of power." The proposed Investor Democracy is Expected (Index) Act.
48:27 -- Final thoughts and recommendations for current and aspiring directors: "The job of a director is tougher than it was 20 years ago, but what we know from evidence today is that it is still a pretty good and important job (people are not leaving it)."
50:18 - What are the 1-3 books that have greatly influenced your life:
Stephen:
Susan:
53:44 - Who were your mentors, and what did you learn from them?
54:50 - Are there any quotes you think of often or live your life by?
56:03 - An unusual habit or an absurd thing that they love:
58:12 - The living person they most admire:
Susan Angele and Stephen Brown are Senior Advisors of the KPMG Board Leadership Center.
__
You can follow Evan on social media at:
Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
__
Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License