Key Takeaways and Tax Planning Points: To prepare for changes in tax regulations, boards should: Confer with management to review financial models – e.g., changes in tax rates, deductions, credits, and exclusions. Stay informed on tax policy changes and reviewing with management to understand realistic scenarios. Consider the possibility of a divided government scenario, which may result in sluggish legislative activity and short-term extenders for expiring provisions. Understand the organization's tax risk management policies, focusing on compliance, reporting, and consulting to assess how c ..read more

Key Takeaways: GenAI can be used to enhance the efficiency and effectiveness in financial reporting and internal controls over financial reporting. Currently, GenAI can help with tasks such as drafting financial statement disclosures, summarizing key contract terms, categorizing expense transactions, and preparing travel and expense reports. However, GenAI is predictive technology that provides users with a probable response, so it’s not going to be 100% accurate and requires human oversight, review, and judgment. Boards should consider the rigor of their GenAI-related governance policies for ..read more

Key Takeaways: Audit Committees should have a playbook when allegations of fraud arise. The Audit Committee’s response level to a particular allegation will depend on the scope of the allegation and the corporate environment. Determining when an independent investigation is necessary and how independent it needs to be is determined by the context of fraud allegations. Timeliness is critical. Care should be taken in communicating with stakeholders ..read more

Key Takeaways: One of the roles of a board of directors is to continually assess the company and make decisions in the best interest of sustaining value for the long-term. Decisions to change business models should be weighed against the core purpose of the organization. Significant strategic changes necessitate the board to broadly evaluate the impacts on significant internal and external stakeholders. References: SEC Chief Accountant Statement: Audit Independence and Ethical Responsibilities: Critical Points to Consider when Contemplating and Audit Firm Restructuring BDO as an ESOP ..read more

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