Top priorities for boards and audit committees for 2023

Boards and audit committees can expect their oversight and corporate governance processes to be tested by an array of challenges in the year ahead.

Throughout 2022, boards grappled with an onslaught of macroeconomic risks and headwinds, and these challenges are likely to continue into 2023. Boards can expect their oversight and corporate governance processes to be tested as a result.

In this volatile operating environment, demands from employees, regulators, investors and other stakeholders for greater transparency and disclosure — particularly about environmental, social and governance (ESG) risks such as cybersecurity and climate — will continue to intensify.

“The business and risk environment has changed dramatically over the past year, with greater geopolitical instability, surging inflation and the prospect of a global recession added to the mix of macroeconomic risks companies face,” said John Rodi, leader of the KPMG Board Leadership Center (BLC). “The increasing complexity of risks unfolding simultaneously, along with the increased interconnectedness of these risks, ups the ante to have holistic risk management and oversight processes.”

Drawing on the BLC’s research, surveys and interactions with directors and business leaders, On the 2023 board agenda and On the 2023 audit committee agenda highlight topics to keep top of mind in preparation for the year ahead.

Key areas of focus for boards in 2023 include supply chain resilience, ESG strategy, human capital management and board diversity. Board agendas should also include a discussion of guidelines for management’s shareholder engagement plan and whether business leaders should speak out on social issues.

“For audit committees, maintaining a sharp focus on leadership, talent, ethics, compliance and culture while carrying out their core oversight duties will be essential in the year ahead,” noted Stephen Dabney, leader of the KPMG Audit Committee Institute.