Join BDO's Amy Rojik as she and Tom Bradbury, Founder/CEO of Broad-Gauge, discuss culture within organizations – specifically how it is measured and what the board’s role is around culture. Key Takeaways • Culture is a team sport that requires the right data for the right stakeholder (including the Board). • Protecting culture is just as important as strengthening your culture. • There is a measurable ROI to culture. • A proxy for culture is measuring organization effectiveness. Resources:     • Nominating & Governance Committee Priorities for 2024: Excelling in Board Leadership • CalPERS ..read more

Key Takeaways: While simple in structure, these new requirements have complex implications for companies, many of which may not be already gathering and reporting this level of climate data. The laws were years in the making but have now pre-empted the country-level SEC climate rules that many have been anticipating. Scope 3 reporting will be required for some companies, which includes the full value chain. Third-party assurance will be required in some cases. Even though the full extent of the requirements won’t come into force until 2030, the first requirements will be in 2026 covering th ..read more

Key Takeaways: Establishing a “safe” environment for AI isn’t just a protective stance, it is itself a strategy that accelerates innovation, builds trust, and ensures long-term success. In making the decisions to address entity- readiness to greenlight AI initiatives, boards’ due diligence includes: understanding how competitors, customers, employees as well as supply chains are using or would like to use/leverage AI; establishing a robust management risk management and oversight governance framework that provide appropriate mechanisms to protect proprietary data; and ensuring internal organi ..read more

Key Takeaways: Using AI and predictive capability is not new but generative AI brings AI to the mainstream due to its human-like communication and ease of accessibility to companies of all sizes. For boards to properly oversee AI risk, they need to require management to establish a model risk management process along with a model risk governance framework around AI implementation that includes standardization of algorithms, governance and ethical considerations as well as validation of data inputs and outputs. Moving to AI changes the human role and underscores the need for a strong risk cult ..read more

Boards need to work with management team to continue to identify and prioritize opportunities in automation to enhance all aspects of operations, product development and service delivery. Challenges in implementing automation need to be identified and incorporate into a strong change management program to ensure enterprise-wide acceptance and adoption. Boards can play a significant oversight role in the automation process by helping management establish guardrails – policies, protocols and controls – and require reporting back on progress as an accountability mechanism in driving change. Beco ..read more

Key Takeaways: 1. Approaching embedding AI into a service delivery model requires: Identifying and prioritizing AI business processes and use cases that align with your business objectives Assessing the feasibility and potential impact of each use case Developing a detailed implementation plan that contemplates the steps, resources, and timelines required for successful AI adoption Keeping cybersecurity at top of mind as well as quality assurance approaches. 2. Adoption and use of AI requires encouragement of curiosity and innovation tempered with a good understanding of the risk and challen ..read more

Key Takeaways: Service delivery models demand that auditors demonstrate their efforts are directed principally to potential risks and anomalies and areas of higher risk. Boards that derive the most value from audits that leverage data analytics are those that have pretty specific views of what constitute outliers or anomalies for the business and that understand the auditors’ demonstrations of how their analytic tools can quickly surface and identify risks and patterns that may not be immediately apparent through traditional audit methods. Boards have potential opportunities to enhance both t ..read more

Key Takeaways: Use of technological automation in the audit can yield increased efficiency, improved accuracy, consistency and quality. Complexity, data quality, lack of flexibility, resistance to change and over-reliance on technology are challenges to automating auditing procedures that need specific consideration. Auditors are intentionally and systematically focusing on automating aspects of the audit that build capacity and streamline systems but that also focus on feedback and enablement of adoption. Board members should be asking auditors about automation use cases and recommendations ..read more

Key Takeaways: Building corporate sustainability is not about “being responsible for” but rather recognizing “how to work in concert with” a broader group of stakeholders to reduce friction and produce better results. Innovation in a staid industry requires: - Creation of an environment to embrace and enable change – first speak about what will remain the same and season in what the change will be. - Recognition that incumbency is NOT powerful (i.e., faulty assumption that formulas in the past will work in the future) - Innovate by embracing what is evolving – e.g., technology Adopt a simpl ..read more

Key Takeaways: The NEED: Data governance programs exist to manage change in data assets overtime. The WHAT: Data is an intangible asset that is constantly evolving and has a host of characteristics that make it difficult to manage compared to traditional assets. THE WAKE-UP CALL: When surveyed, 95% of respondents felt data governance programs were unsuccessful. The PITFALLS: Poor data governance stems from: poor data quality, lack of enforcement of policies and procedures; and data security and privacy practice that don’t evolve with hacker sophistication. The HOW: - Board directors should b ..read more