With a new decade comes new ideas, topics and trends that change the way business is done. Publicly traded companies must stay ahead of the curve if they want to remain successful. Below are three trends to consider in 2020.
Shareholder Value May No Longer Be Top Priority
Shareholder profits may no longer be the primary focus of corporations. More than 180 of the top companies in the U.S., including Amazon, Walmart, Chase and Apple, announced this shift in corporate purpose in August. The CEOs of these companies signed a pledge that stated that more emphasis should be on stakeholder value rather than that of shareholders. Corporations are starting to put more focus on the needs of their customers, the environment, their employees and the communities in which they operate. This fundamental change in corporate purpose is being driven by the Business Roundtable and the momentum shows no signs of slowing down. According to Forbes, this is the first time since 1997 the Business Roundtable has said that the main goal of corporations isn’t to please its shareholders.
Environmental, Social and Governance (ESG) Reporting
Another trend to dominate the attention of public companies will be environmental, social and governance reporting. ESG matters are becoming increasingly important to investors as they look to mitigate risk and increase returns. They are turning to company ESG reports and other public ratings and rankings for data to support their investment decisions. Companies that are best able to manage and report on ESG issues will see greater interest from investors. Corporate boards can play a large part in the data-gathering process by steering management toward a system where the data can be captured and reported. As with any data-focused project, it could take some time for the information to gathered, synthesized and communicated. Be assured that this trend will continue to grow.
Increased Corporate Board Diversity
Gender inequality is real, especially at the top levels of publicly traded companies. Corporations are setting their sights high this year with efforts placed on diversity in the board room and other high-level management positions. Women, specifically, will be the primary focus in high-level roles this year. According to the Corporate Women Directors International, three American financial services companies are already jumping on this opportunity—Progressive Insurance, TIAA and Wells Fargo—with an average of 43.7% women directors.
Keeping up with trends such as these is important for any public company. It’s equally important to communicate where your company stands on these matters through investor presentations, your company website, ESG reports, annual reports to shareholders or other means. Want to strengthen your investor communications? Contact Roop & Co. at 216-902-3800 or check out our quick guide to creating an annual report people will actually want to read.