We’ve reached that time when board members begin to peer ahead—sometimes with trepidation—to the coming year.
KPMG and NACD released detailed outlook reports for corporate governance in 2023. The upshot for board members is this: Expect to deal with more of the same issues that tested your board’s effectiveness over the past year; only now, you’ll have the threat of an economic downturn providing an extra layer of risk. Fun!
Boards should plan to spend even more time in meetings than last year, as I write in this new piece featuring advice from Paul Knopp, CEO of KPMG US, and several board members. One of Knopp’s key insights is that companies should be cautious about their recession response and not default to mass layoffs. He says that strategy could backfire should the economy rebound quickly, as it did in 2020.
The story continues:
"Boards considering layoffs should also reflect on what the cuts would mean to company culture. Several CEOs have begun warning employees that they’ll need to hustle and be 'hardcore,' but Knopp says companies should recall the pandemic experience and the resulting burnout epidemic, as well as the progress companies have made in recognizing the importance of employee well-being.
Susan Chapman-Hughes, a director at The J.M. Smucker Company and Toast, strikes a similar note. 'COVID has shifted the mindset of workers,' she says. 'There’s certainly a group of employees who have decided they no longer want to commute to the office every day and have managed their lives differently as a result.' Although companies and boards will have to formulate hybrid work policies, she adds, the real emphasis should be on creating an empathetic company culture that helps retain and attract employees."
Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan
