Risk, sustainability and the importance of real-time data

Intro Speaker: Welcome to the Corporate Director Podcast, where we discuss the experiences and ideas behind what's working in corporate board governance in our digital tech-fueled world. Here, you'll discover new insights from corporate leaders and governance researchers with compelling stories about corporate governance, strategy, board culture, risk management, digital transformation, and more.

Dottie Schindlinger: Hi, everybody, and welcome back to the Corporate Director Podcast, the voice of modern governance. My name is Dottie Schindler, executive director of the Diligent Institute, and I'm joined once again by my co-host, Megan Day, strategy leader here at Diligent. Megan, how are you doing today?

Meghan Day: I'm great, Dottie, despite the pollen, but that's just a sign that-

spring has sprung. We are in the throes of proxy season, about to head into our Elevate User Conference, so lots going on in our world.

Dottie Schindlinger: Yeah. It's, it's feeling like a full-on sprint right now, Megan, and in fact, you know, you say about the pollen, we have these two massive cherry trees in our front yard, and this weekend we celebrated Pink Fest.

Which is the... Right around tax day every year, those trees are in full bloom, and then within 24 hours we have a pink snow covering every square inch of our front yard. It's really quite, quite spectacular, and, uh, we're now at, at peak pink snow. So we had to celebrate Pink Fest this weekend. But Megan, um, I wanna also make sure to acknowledge our special guest who's joining us once again.

I'm excited that she's back on the show. Kira Ciccarelli, who is the senior manager of research and programs for Diligent Institute. She's also one of our podcast producers. She's also, uh, one of my favorite people to talk about any governance research because she's doing most of it. So Kira, welcome back on the show.

Kira Ciccarelli: Thank you as always for having me.

Dottie Schindlinger: Well, I'm excited to hear from you, Kira, 'cause I know we are mere hours away from the kickoff of Elevate, and one of the things that I'm particularly excited about launching this year at Elevate is our General Counsel Risk Index. So do you wanna talk to us a little bit about what's in this edition of the report?

Kira Ciccarelli: Sure thing. So this is a survey that we've been doing for about a year now. We started it at the beginning of 2025, and it's a global survey of general counsel, chief legal officers, and other sort of chief legal leaders. This was conducted amongst public and private companies. Again, global. This edition of the survey we got about 150 respondents, and it was in the field last March.

One of the questions that we ask every edition of the survey is for the respondents to rate the level of risk facing their organization currently on a scale of 1 to 10, with 10 being the highest. We saw this risk level spike throughout 2025, and our latest reading indicates that it is remaining pretty high.

So it began at a 5.8 out of 10. At the beginning of 2025. Should be noted that that survey was fielded after, um, sort of the initial tariffs announcement in the US. So already starting from a baseline pretty high level. It then spiked to close to eight at the end of 2025. Now we're at a seven out of 10.

So risk levels are elevated and have maybe settled a little bit, but they're settling at a high level.

Dottie Schindlinger: Well, and you know, what's interesting about this too, Kira, I think it's probably helpful just to explain why are we asking general counsels about risk? A- and that's partly because we've had this observation over the past number of years that the general counsel/chief legal officer role has begun to take an outsized role in overseeing enterprise risk at their organizations.

It's now, you know, whether or not that person is in fact the chief risk officer is a- an open question. But it certainly does seem like general counsels are spending a lot more of their time overseeing risk, and in fact, in this edition of the survey, we, we found that pretty emphatically, didn't we?

Kira Ciccarelli: Yeah, absolutely.

So we asked a couple questions to sort of get at this theory that we had had and what we had been hearing anecdotally from customers and clients at Diligent, and what we found was almost half of our respondents, I believe the ans- the number was 46%, are spending between 21 and 40% of their time on enterprise-wide risk and compliance coordination.

Another 25% said that they're spending between 40 and 60% of their time on this. So three-quarters of our respondents are spending between one and three days out of their week, every week, on risk and compliance coordination as opposed to traditional legal work. So I think we, we had a feeling this was happening.

I don't know that I would've put the numbers quite this high. We also asked whether or not the amount of time that they've been spending doing those activities has increased or decreased relative to the beginning of 2025, when we started fielding this survey initially. Two-thirds said that it had increased.

One-third said it had stayed the same. I believe it was 1 or 2% said it had gone down.

Dottie Schindlinger: Yeah, so Megan, I'd love for you to reflect on this a little bit, 'cause you, you work very closely with the risk and audit side of our business. I mean, does this surprise you at all?

Meghan Day: Not really, and part of me thinks about how over the last, gosh, 10 years, the scope of the general counsel's responsibility has changed because the scope of risk has changed in terms of what an organization really defines as risk.

And that, like everything else related to the board, continues to grow and grow and grow and grow.

Dottie Schindlinger: Well, what, what's defined as risk grows, the severity and complexity and sheer number of different kinds of risk continues to grow. But Kira- Do they have the tools they need? 'Cause this is something else we asked, and what did we find out?

Kira Ciccarelli: Yeah. So I think to set the baseline, risk levels are high, scope of risk is expanding. We're seeing that kind of seep into the general counsel role, but it doesn't seem like the structure and the tools and the processes have caught up to this new mandate or newer mandate. So only about 19% of our respondents said that their systems were fully integrated, uh, their governance, risk, and compliance systems.

So if legal is having to oversee risk and compliance and none of those systems are talking to each other, that seems like a problem. The reporting lines also seem, frankly, like a nightmare. There isn't really a one-size-fits-all approach for who reports to the GC and who does the GC have a dotted line to, and how is that information getting surfaced up to the board.

If most GCs are telling us that they're overseeing risk, but only a quarter of them say that risk reports directly to them, that seems like it's going to be a problem really, really soon if it isn't one already. That sounds

Dottie Schindlinger: like a gap.

Kira Ciccarelli: Yeah, absolutely. And we also asked, you know, "Do you think that the board is getting the right information on risk?"

Only 21% of GCs says that they were really confident that this was happening.

Dottie Schindlinger: Now, I find that fascinating because, you know, by and large, we think of the legal team as being the main deliverers of information to the boards. If the legal team is saying the board's not getting the right information on risk, that, that seems pretty astounding.

Meghan Day: I think it just comes down to that breadth and depth that we talked about before. It's just, like, the scope and magnitude of everything is so much greater than it has been before. Like, boards need help knowing what they should be looking at. And I think now we're seeing because GCs and their teams are getting more involved in this, you know, most organizations don't have a chief risk officer, and if they do, they're likely a financial services infr- institution, and they're thinking about risk in maybe a different way than a, a manufacturing company.

So I think there's a lot to learn, and we've definitely seen that and heard that from our customers.

Dottie Schindlinger: Well, and, and to your point, Megan, and, you know, kind of reflecting on the, the data that Kira just shared, you know, if I think about risk, right? We say risk, and it sounds great when you say it fast, but when you really start to break down, like, what are we talking about?

We're talking about cyber, we're talking about AI, we're talking about supply chain, we're talking about talent. We're ta- I mean, like, we're kind of talking about anything.

Meghan Day: It's anything that could impact the strategy of your organization or delivery of the strategy of your organization.

Dottie Schindlinger: Exactly. And so I can imagine That now you have a bunch of general counsels who are asked to kinda make sense of this universe, and they've got this spreadsheet over here, they've got this dashboard over there, they've got this report from this third place, and none of those three things are the same.

They don't talk to each other. They're not normalized so that you can look at them and compare how are we doing in this area of risk versus how are we doing in this area of risk. It's like they're co- uh, they, they've always been managed in silos, and yet we know that is not the way the world works. You know, what's happening with cyber is gonna be completely impacted by geopolitics, and what's happening with supply chain can have impacts on talent strategy, and, like, these things are all interwoven.

And so getting one system that helps you understand how all these things flow together, it's becoming increasingly vital, and it just sounds like it's pretty much nonexistent for most companies right now.

Kira Ciccarelli: And if you're looking at this problem and saying maybe this is somewhere AI can help, it doesn't really seem like legal leaders are reaping the rewards of that quite yet.

That was another question we asked where only about half of them said that they're seeing measurable, sustained efficiencies from AI use. And we know from previous editions of the survey that most of the way legal leaders, and honestly I think anybody in the corporate world, right now the AI use cases are short win, efficiency-type tasks.

So for legal departments, that's things like contract review and management, not really being able to utilize AI power effectively, I think, to maybe streamline this information, connect some of these dots.

Dottie Schindlinger: There's a, there's a lot to unpack there. So Kira, where can people find a copy of this report?

Kira Ciccarelli: You can find that live on diligent.com in our Resources section.

Dottie Schindlinger: That's great. Well, highly recommend everybody give it a read. I think it's really interesting whether you're in a legal profession or not to understand how things are shifting around the oversight of enterprise risk management. And to that end, that's actually kind of an interesting segue to today's conversation with Mike Wallace.

Megan, I, I got the opportunity to sit down with Mike. Um, he serves on the board of Climate Trust. He's the founder of Wallace Advisory, and he's an advisor to Persefoni and S&P Global all around sustainability and climate issues. And, you know, what's kind of interesting is he makes a pretty strong case for why companies still need to be thinking about these issues if they wanna do business anywhere but the US, and also if they wanna do business in California.

So, um, it was great to have a chance to chat with him, and maybe we'll give it a listen and then come back and talk a little bit about what we heard.

Joining us on the Corporate Director podcast today is Mike Wallace. Mike is the founder of Wallace Advisory, and he serves on the board of Climate Trust and as an advisor to Persefoni and S&P Global. Mike, welcome to the show.

Mike Wallace: Thank you, Dottie. It's great to be with you today, and thanks to Diligent for hosting us.

Dottie Schindlinger: So before we dive into our conversation, I know we're gonna talk a, a bit about sustainability and sort of where we are right now. I'd love to have you do a little bit more of an introduction for our audience beyond the couple of titles that I just rattled off. So tell us a bit more about your career background and some of your current work.

Mike Wallace: Sure. So, um, fortunately got into this right out of college 30 years ago, and the original work that I was doing was when banks would loan money on a commercial deal, they would have a third-party environmental consultant review the property and the operations of that company. And so w- what is technically M&A deal was going down, and I was doing the environmental due diligence.

And that expanded over time to include health and safety, so you start to get the people component of it, too. If you're gonna buy a company, you wanna know all the potential risks and governance issues are there. Fast-forward 30 years, I've worked for nonprofits like the Global Reporting Initiative. I was a partner at ERM, uh, most recently, and then helped start up a number of nonprofits and for-profits over the course of my career.

One more recent development is I helped Trucost get their footing in North America, uh, probably 15 years ago, and later on, Trucost was purchased by S&P Global. Um, part of this work that I do now as an advisor to th- organizations like Persefoni and S&P is to help understand the North American market and figure out how to help US companies and Canadian companies deal with sustainability issues as they emerge around the world and domestically as well.

Dottie Schindlinger: So that's a really good segue to our conversation because, you know, you were very kind to invite me to a webinar that we did together recently for UCLA on the topic of sustainability, really kind of looking at procurement specifically and supply chain, and really that understanding that everyone is someone's scope three, right?

So every company is both a supplier and a customer, and, you know, large buyers are increasingly asking about their suppliers' environmental and social performance as part of the sales and bidding process. So I, I'd love to have you talk a little bit about when you talk with boards about that idea, how do you explain why this has become a board level governance issue tied to revenue, risk, and compliance rather than just a standalone reporting exercise?

Mike Wallace: The simplest way to tell it today is to give a story about the UK's National Health Service. UK National Health Service is a very large healthcare system. Think about the hospitals we, that we know of here in US, right? Here's a nation and a national system that put out an RFP about two years ago, and in the RFP it said, and it's a request for proposal, right?

This is a multimillion-dollar contract opportunity that was put out for medical equipment device manufacturers. Think about all the companies you know, right, that are common names in our households and on the S&P 500. They received this RFP. Several of them panicked because they didn't have all the information that was necessary f- to fill out this RFP Part of that RFP had a simple table in it that just said, "Please fill in your greenhouse gas emissions, scope one, two, and three, how you got the number, the methodology, and whether you had any of the numbers verified by a third party."

Several US companies got a little bit panicked about this because they wanted to keep that contract, a major national health service. And so this is when it become the board level issue. It's like, are you even aware of what your biggest buyers are asking of your company? Are you aware that some of these requests are coming in in a very B2B formal manner that are resulting in disclosures that you might not even be aware of?

And are you aware that sometimes the B2B activity even includes third-party verification of this information? And that's just one example, the greenhouse gas example. There's much more out there going on in B2B that we don't know about because we're, we're not able to see it.

Dottie Schindlinger: Well, I think, you know, that's certainly true in things like modern slavery, right?

Because there's, there's so many provisions in different countries around the world that you must be able to prove that a product has no forced labor anywhere in the supply chain or the value chain. And being able to prove that, I think, becomes really, really complex and really, really hard.

Mike Wallace: Oh, yes. Very true.

Very true. And there are other areas. You know, if you do government contracts or even state-level contracts or even county and city-level contracts, there's still a lot, lot of language in there about is this a minority-owned business, you know? And that becomes a kind of a DEI issue, right? Mm-hmm. Or are you, um, a veteran, you know?

Uh, so there's contracting questions that are out there in the world that would fall under the sustainability bucket, and your company might even be asking them of your own suppliers, and you're not aware of it as a board member, right? So it's a interesting time for this, and, and that ties it directly to revenue.

You wanna keep winning bids, right? Have you monitored your RFP process, the bid process? Is marketing and sales telling an accurate story when they're telling their story versus what's being put into the actual formal contracts that are going on?

Dottie Schindlinger: So I, I think back to, you know, kind of 2022 when, you know, ESG, at least in the US, had a big vogue moment.

You know, there was cert- certainly a period of time where it was the only thing anybody was talking about. Now everybody's only talking about AI. But I wanna go back a little bit and, you know, uh, if I think about the way organizations kind of mature in their sustainability oversight, you know, is it full board ownership?

Is it owned by a specific committee like nom and gov or audit and risk, or maybe even a dedicated sustainability or ESG committee? Maybe sometimes there's a combination. What are some of the patterns that you're seeing in practice now? I mean, things have changed quite a bit since 2022, so what are you seeing happening today?

Mike Wallace: I would say there's a major shift in the dynamics within the companies at the management level. So I've had a number of colleagues that have been let go from companies that were in the chief sustainability officer role In those boom moments, you know, five, 10 years ago, a lot of my time was spent with the chief sustainability officer helping them get stronger and actually helping them get to the board level presentation.

Part of that work involves obviously the general counsel and the legal team, who then gets you the corporate secretary ear, and then the investor relations if they're publicly traded. And those are two key partners to the chief sustainability officer. HR would be there too because there's a h- human capital and human rights component to these stories.

Now what we're seeing is more like the risk and audit committees are much more involved now, and part of this has to happen because of the regulatory developments in other parts of the world. And even at the stock exchange level, if you're a dual-listed company, you might not have the requirement in North America that you have in European stock exchanges, right?

And so there's a dynamic there that is going on at the board level where audit and risk needs to be involved. There are human capital components that still percolate up to the board level, attraction of talent, right? Continuity. Are we attracting the right kinds of people for the right kinds of customers that we serve, right?

And there's a real interesting dynamic going on at the C-suite among companies right now about, okay, we're gonna get rid of this phrase DEI, but there are dynamics to what human capital management pertains to that we still need to pay close attention to. So we're seeing that shift around a bit, and AI's got a lot of people distracted by a lot of this, but, you know, the common denominator and what we even talked about with that UCLA webinar was the component of energy.

You know, everybody needs energy, and everybody needs kilowatts, and AI is demanding a lot of kilowatts. So what are boards doing about that?

Dottie Schindlinger: It's a good question. So to that point, you know, boards might be sort of asking themselves right now as they listen to this podcast, like, who owns this? You know, who, who kind of owns sustainability and human capital strategy, and how should they be thinking about dividing decision rights and accountability between the full board, committees, management?

Um, you know, especially when I think about things like measurement or management performance or disclosure, who should own what?

Mike Wallace: I think it's gonna need to be the audit committee because of the NHS story that I told. There's an RFP that actually is asking for third-party verification, right? The laws that are being implemented around the world are referencing the ISSB, the International Sustainability Standards Board.

Around 40 nations have adopted these as the go-to for their countries. And in there is a very descriptive part about the greenhouse gas footprint. And without politicizing this in any way, greenhouse gas footprint methodology has been around for 25 years. It's called the Greenhouse Gas Protocol. We're in 2026, and you don't know your scope one and two, even as a board member, you don't know that you have a scope one and two number, we have a governance issue here.

This has become basic accounting, and your finance team is probably where this will start and should live But the corporate secretary and legal counsel need to monitor these regulatory developments, including the state of California and New York, and figure out, "When am I gonna need to get these numbers in order?

And are they bulletproof and verifiable?"

Dottie Schindlinger: So you've just listed a couple of ways that, you know, not knowing this information kind of points to maybe a lack of governance. So what does good oversight look like? I mean, h- how should they be moving from ad hoc updates to a really disciplined level of oversight?

What, what should that look like in practical terms?

Mike Wallace: Okay. So if you're publicly traded or if you're private, right, you still have investors and you still have financiers that are supporting you, have you done a due diligence process on your biggest investors or lenders or insurers to see if they're asking questions about these issues?

And in many cases, those big institutions are international, and they are adhering to requirements internationally. They're also adhering to requirements of their other large customers, sovereign wealth funds, public pension plans, et cetera. So even though we hear sometimes in the public domain, "Nobody's asking about these things," I beg to differ.

If it's truly a material issue, the investors and the loan officers and the insurers are doing their due diligence. They just might not be talking about it on public stages, right? So that might be one thing you wanna do. The other would be thinking about your biggest contracts. If you're gonna meet your customer where they are, and if the customer is always right, why would you snub your nose at a large customer that's asking you three basic things, scope one, scope two, and scope three, you know?

And that's the NHS example. T- you know, $10 million contracts were up for grabs, and you're sitting there as a medical equipment manufacturer looking over your shoulder going, "I wonder what my competitor is saying. You know, my competitor from Europe probably has all these numbers already, right? My, my competitor from, in the US might not have these numbers," right?

And that's literally what was going on 'cause I was talking to a lot of these companies at that time because I wanted to find out what their reactions were.

Dottie Schindlinger: Such a good point, Mike. So, you know, I, I think about board members and areas of expertise. I'd be hard-pressed to think of very many board members who I would think of as sustainability experts.

I think a lot of board members don't really see themselves as sustainability experts. So what are some really practical, concrete, board-appropriate questions they can ask, especially to the management team, to kind of understand the robustness and, and suitability of their sustainability strategies and data and disclosures?

What, what should they be asking?

Mike Wallace: I would be asking about largest customers and w- where those customers stand on sustainability-related issues. And I would ask, are we reviewing the RFPs at the management level to see if what types of questions we're getting in? Do we see any patterns? Is there a common issue that keeps coming up in the requests for proposals or requests for qualifications or et cetera?

Contracts change, right? And every few years, people will go out for a public RFP process, and it's in those public moments where you and I can see these things too if we get on that list of receiving it. The other would be to monitor those biggest customers too and think about where they're going next.

What do you, what do I mean by that? Many times, largest corporations have made public commitments to certain sustainability initiatives in the world, and they make commitments that are time-based. So if they're trying to reach a certain goal by 2030, how do you help them, right? How do you be that best friend, that best supplier?

How do you help your customer succeed? And so that's an angle of sales and marketing and, and R&D that is already playing out, especially here in California, because as we transition to a low-carbon economy, which many parts of the world are doing, you gotta think about the technology behind that. What does that look like?

That looks like batteries. It looks like wind. It looks like solar, and there's whole areas of job creation because of that great decarbonization pathway that the world is on.

Dottie Schindlinger: So I wanna, I wanna kinda double-click on that for a moment 'cause you also mentioned, um, and I think quite astutely, that with everyone having conversations about AI, we do need to think a bit about energy procurement.

You know, that's kind of a universal. We have to think about where's our energy coming from, and we're gonna get asked questions about that, right? Especially if we're on a board, we may need to know those answers. So could you kind of walk us through how a board might oversee something like kilowatt consumption and sourcing, and how that connects to procurement risk, business continuity?

Especially thinking about this incredibly complex geopolitical situation that we're in right now and this very complex market context, what would effective board oversight of, you know, energy procurement really look like in the boardroom?

Mike Wallace: One place would be to think about the utility companies that are across the country, right?

Perfect example, I've been working with this c- this sector for a long time. Midwestern coal-fired power plant versus West Coast multifaceted power plant, right? Meaning they diversified their sources of energy to create the kilowatts that we needed, right? And so diversification, just like in your investment portfolios or just like in your customer base, you wanna diversify.

So if you're buying your power from a high-intensity fossil fuel-using utility company, your carbon footprint is bigger just by default. But, but you can m- shop for different kilowatts. And in our field, there's a lot of different titles like ESG, CSO, et cetera, but, you know, in our world, energy is a very common title within companies, energy manager or energy in some sort.

And if you think about right now, perfect time right now is like, why are our costs going up so much? Because we're so dependent on fossil fuels, and we're in the midst of a war. Had we diversified our energy resources and sources of energy- Might we be in a better spot? Had we electrified our factories and put solar and battery systems in place, would we still need to buy as many kilowatts from the local utility?

That, and the u- local utility is dependent on fossil fuels, so their s- their prices are going up, therefore our kilowatt prices are going up. So asking about energy management from the board level and seeing what sort of spikes are occurring right now, and talking about diversification and resilience, right?

How do we, how do we solve for this going forward? Are we too heavily involved in fossil fuels? Are we too dependent on the situation and this ma- massive bottleneck now in the global markets that's causing us to have our costs go up and our profits go down? So energy management's probably the key thing right now.

Everyone needs kilowatts, right?

Dottie Schindlinger: Absolutely. Well, Mike, this has been really thought-provoking. Thank you so much for having this conversation. But before I let you go, there are three questions that we like to ask every guest that joins us on the show. So the first question is, what will, what do you think will be the biggest difference between boardrooms today and 10 years from now?

Mike Wallace: I think access to real time dashboard data, um, on performance. You know, and I've seen this in board solutions before. Entire boards have an iPad that's been distributed by the company. But imagine you're sw- swapping through and you're seeing real time information on your energy usage across 50 sites across the world, right?

And maybe that's in dollars or a certain currency, but maybe it's also there in a greenhouse gas number as well, right? Same thing with other real time data that's gonna be coming in. But then hyper transparency, right? There's so much out there now, and we gotta make sense of the noise, but getting access to data and being able to truth check a company's statements is becoming more and more accessible.

Dottie Schindlinger: I love that. And what was the last thing that you read or watched or listened to that made you think about governance in a new light?

Mike Wallace: You know, I think it was probably when you and I did that webinar with UCLA, um, because we had John Driver on there from NACD, and Doona Ives on there, and she is a independent director on DePaul Corporation.

You know, and we, we teased out the relevance of these issues to board members, you know. And while we did talk about the flipping and, of the market and the attention on things like AI, we still, I think, collectively discovered that these issues are important, are material, and if managed- And

Dottie Schindlinger: not unrelated to AI, actually

Mike Wallace: No, not at all.

And, and- Right ... if, yeah, managed properly, can be a competitive advantage.

Dottie Schindlinger: Absolutely. And finally, Mike, what is your current passion project?

Mike Wallace: Great question, and it is related to business schools and universities, and it has to do with being asked so many times to come and speak to business schools about the field of sustainability and careers in this field However, a couple years ago, I turned that on its head and I said to the professor, "Before I come in and do this, I wanna propose we do a project.

And your own university's president has made a commitment to sustainability. Here's their letter. It's in the public domain. Your institution has a very large endowment invested in the markets, and your institution buys a lot of things. You have a massive supply chain. Let's put students on a due diligence project to look at their own endowment and the footprint of those choices of stocks, and put the students on a project to look at your own supply chain."

What's around those students? Their tuition is being used for these things, and these students wanna go out and work in this field. Let's have them work on a project that's really relevant to their own campus. It's gonna help the campus, it's gonna help the president, whose name's on some climate commitment, and it's gonna help the students understand the portfolios that are around them already, the supplier portfolio and the investment portfolio.

Then you can go to Wall Street or even on Main Street and get a job in sustainability.

Dottie Schindlinger: I love that. Well, Mike, thank you so much for taking the time to speak with me today. It's been really, um, interesting and thought-provoking, so thank you.

Mike Wallace: Thank you, Dottie. Again, appreciate your time and, uh, thanks for setting this up.

Dottie Schindlinger: We've been joined today by Mike Wallace, founder of Wallace Advisory, board member for Climate Trust, and advisor to Persefoni and S&P Global. Mike, thanks so much for joining the show.

Mike Wallace: Thank you.

Meghan Day: Great stuff, Dottie. You know, coupled with the earlier risk conversation, certainly would plug ESG, sustainability, all of that into the broader, um, set of risks that an organization needs to think about. It's just, again, it hasn't gone anywhere. It may have fallen down the list of, uh, agenda topics for boards, but for certain organizations, it's still, you know, firmly front and center, and for others, they still need to talk about it.

It just might not be the hot button thing that they have to, to tackle in the next board meeting.

Dottie Schindlinger: Yeah. I thought he made a really compelling case. I thought his analogy or really his use case about, you know, the National Health Service in the UK, for example, that if you wanna... You know, there's 10 million contracts up for grabs, and if you wanna bid on any one of those, you have to be able to disclose scope one, two, and three.

And it's, it's just, you know, that's what you have to be able to do. And, you know, if you're an American company and that's not something that you're required to do right now by any sort of US regulatory body, you might be a few steps behind. Um, and that puts you at a, a real competitive disadvantage if you wanna try to land any of these lucrative contracts.

And these contracts only change every so number of years, right? So having that information available and disclosing that information, I think those are two different things. But being able to say that, "Yes, we do disclose, and here's what we disclose, and here's what the answer is," really matters if you wanna do business in, in any of these different places.

And there's a lot, there's kind of a lot of potential sales on the table. So it was really interesting.

Meghan Day: Yeah, for sure. And- The, the idea of real-time visibility into the questions and the data that would be useful to board members to drive strategic decisions, be it related to ESG sustainability or any other risk topic, I mean, it continues to come up as a really important point in how boards get their arms around the breadth and depth of all of these things that they're facing.

And so that you're able to, I wanna say, like flex up and down depending on what that hot, critical, important thing is that you need to look out, uh, you know, right now front and center. And so, you know, while we were joking before, you know, two years ago, we were talking all things ESG and sustainability all of the time, and now that's AI.

In two years, it's definitely going to be something else. And so boards have to be thinking about how they can just get a better handle on all of the risks facing their organization.

Dottie Schindlinger: Well, and Kira, we know from our report that getting a handle on all the risks facing the organization now falls on the plate of the general counsel, right?

Kira Ciccarelli: Yeah. Or it's increasingly looking that way. And I think this answer, we've started to get a lot about what do our guests think is gonna be the most different between boardrooms today and 10 years from now. This access to real-time data and dashboard reporting is becoming one of the most popular answers we're seeing.

Meghan Day: I have to laugh. Um, uh, a few years ago, it was this-- There was a lot of talk in the GC community about how we're seen as strategic partners and how we're really adding value to the organization. And now I would say, careful what you wis-wish for- Yeah, really ... General Counsels.

Dottie Schindlinger: It's really true. Well, it, it's, it's funny, Megan, that you say, like, the careful what you wish for.

I had the opportunity last week to go to the Latino Corporate Directors Association Board Ready Institute, and it's always put on by KPMG at their offices in Boston. It's a great event. And Steven Brown, who's the head of the, um, the Board Leadership Center at KPMG, he, he had a reaction to this idea of real-time data for directors that I'd never heard anybody articulate before, and I thought it was kind of interesting.

He's like, "You know, do we really want that? Do directors really want that?" And I was like, "Well, what do you mean by that?" And he was like, "Well, you know, the, the concern is if they're getting real-time data, are they also getting the context? Are they also getting the, the sort of retrospective? And just because it's information doesn't always mean that it's something you have to act on."

And so, I mean, he's got a point, but I also do think that I just, I just don't see how you make good decisions when all you have at your disposal is data that's, like, two to three weeks old and has been so carefully curated and edited and s- you know, trimmed down that you're not really seeing the full picture.

I, I think there's somewhere in the middle is the sweet spot. Like, I do think we, we talk about real-time data, but that doesn't mean it has to be divorced from context. Like, that, it's not, that's not a, that's not a de facto conclusion, right? It's not just because it's real-time data you don't see context.

I think both things need to be true. Um, and there probably does need to be a lot of management involvement to make sure that what is showing up on the dashboard for the board is accurate and relevant and something they need to care about. But also, I think having old information makes it well-nigh impossible to do a good job with risk.

I mean, think about, think, think about this. Okay, we're, we're recording this on April 20th, and, you know, like, what was it? Six weeks ago, we weren't at war with Iran. So, like, you know, you need to, you need to be able to, to kinda keep up with what's going on and to understand how things are changing in real time, and y- you just, you just have to be able to do that.

And I, I just, I don't know how boards can do that if everything is overly curated, old, you know, handed to them after it's all been perfectly synthesized. I don't know what, what are your thoughts, Megan?

Meghan Day: Well, I'm just waiting for our first guest to say what's going to be the biggest difference between boardrooms today and 10 years from now, that maybe boards of directors won't exist 10 years from now.

Dottie Schindlinger: It's an interesting question. I think that's gonna be kinda largely up to shareholders though, right? Like, I feel like the, one of the main reasons, not the only reason, one of the main reasons you have a board is to serve as that proxy for the shareholders, and to have their perspective enter into the conversation with management and to push management and et cetera

Meghan Day: But if, you know, if you're only filing reports once a year now or whatever it's gonna be, you know?

Dottie Schindlinger: Oh my gosh, Megan. Well, on that existential note, that wraps up another episode of the Corporate Director Podcast, the voice of modern governance. Like to say a few special thank yous, first and foremost, to my amazing two co-hosts, Megan Day and Kira Ciccarelli, who is also a podcast producer. Our sustainability expert and guest, Mike Wallace.

Podcast producers Steve Clayton, Laura Klein, and Kira Ciccarelli. Sponsors of this show, including KPMG, Wilson Sonsini, and Meridian Compensation Partners. And most especially, thank you to Diligent for continuing to sponsor this show. If you like our show, please be sure to give us a rating on your podcast player of choice.

You can also listen to our episodes and see more from Diligent Institute by going to diligent.com/resources. Thank you so much for listening.

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