EDITORIAL: A VIEW FROM ACROSS THE POND
January 2025 Edition - Written by Lesley Stephenson
Given the impending change of administration in the US later this month, and the saying that ‘When America sneezes, the world catches a cold’ (attributed to Austrian 19th-century diplomat Klemens von Metternich), we are pleased to share a report this month from the US practice of KPMG.
KPMG states that boards can expect their oversight and corporate governance processes to be put to the test in 2025 as companies face unprecedented disruption and uncertainty. The new administration’s policy positions—on tax, trade, immigration, and regulation more broadly—may significantly impact the economic, geopolitical, business, and risk landscape. Risks related to cybersecurity, climate change, and artificial intelligence (AI) will also present substantial challenges.
Drawing on insights from their conversations with directors and business leaders, KPMG has highlighted nine issues for US businesses to consider as boards plan and execute their 2025 agendas. We believe these issues are equally relevant for other jurisdictions.
Focus on how management is preparing to address risks and opportunities related to geopolitical and economic shifts and global disruption.
Model and assess what the new US administration’s policy initiatives might mean for the company’s strategy in 2025 and beyond.
Understand the company’s generative AI strategy and related risks, and closely monitor the governance structure surrounding the company’s deployment and use of the technology.
Probe whether the company’s data governance and cybersecurity governance frameworks and processes are keeping pace with the growth and sophistication of data-related risks.
Keep environmental and social issues, including climate risk, embedded in risk and strategy discussions, and monitor management’s preparations for new global sustainability reporting requirements.
Maintain the focus on CEO succession and talent development.
Help set the tone, closely monitor the culture, and stay abreast of management’s efforts to build stakeholder trust and protect the company’s reputation.
Revisit board and committee risk oversight responsibilities and the allocation of issues among committees, including whether the existing committee structure is still fit for purpose. This is particularly relevant for UK companies in light of the changes to the 2024 Corporate Governance Code, which came into force on 1st January 2025.
Think strategically about the company’s future needs and reconsider whether and how the board’s composition and succession planning process address them.
You can find the full report here.