Welcome to this week’s issue of Governance Insights!
Today, we’re embracing new ways to engage in 2024, prioritizing long-term relationships, and preparing for new cybersecurity rules.
Meet Harvey: The AI tool “super-powering knowledge work” for law firms
Harvey is a recently-funded AI platform set to transform law firms by streamlining case research, contract analysis, and overall operational efficiency.
Targeting a traditionally cumbersome and complex industry, Harvey aims to empower law professionals with enhanced productivity and insights.
Harvey marks a pivotal moment for AI adoption within an industry historically resistant to rapid technological changes. One thing is for sure—the appetite for artificial intelligence tools is accelerating.
Now to this week’s insights…
Over the next few weeks, many of us will reflect on our 2023 accomplishments and set new goals for 2024. One resolution often jotted down is to keep in touch more with family and friends.
But we tend to go about this the wrong way.
One reason we fall short is that we set too high a bar. We may aim for some meticulously planned grand gathering, some single event to catch up on everything.
So, why not lower the bar?
More daily texts to your family or a quick chat every few weeks with a friend. Give yourself more opportunities to connect. These seemingly smaller gestures become the catalyst for stronger more meaningful relationships!
Now think about your employees, your shareholders, your investors—these are important relationships to strengthen too.
But again, have you set too high a bar? Do you rely on a single annual report to sum up 365 days of highs and lows? Why not aim for more frequent micro engagements—post a company update when it happens, send a personalized email with a tailored message.
Create more opportunities to connect!
- Real-time Company Updates. Share timely updates on company developments, milestones, and key achievements as they happen.
- Personalized Group Emails: Personalization enhances engagement by delivering content (updates, financial reports, etc.) that is relevant to specific interests and concerns.
- Digital Voting Initiatives: Give shareholders an online environment to see, sign and send documents for proxy voting, addendums or fundraising campaigns.
- Video or Webinars: Whether it’s for shareholder education or company announcements, recording video is a quick and easy way to connect
Here's to forging connections and strengthening relationships in the new year!
Nurturing Long-Term Relationships
Since we’re thinking about the future…
Building lasting relationships with shareholders, whether in pursuit of a future acquisition or striving for another century of family ownership, holds profound significance.
So, to enrich your blueprint for enduring relationships in 2024 and beyond, consider the following ideas:
Prioritize understanding shareholder needs and expectations. Building lasting relationships requires deep knowledge of their motivations, concerns, and goals.
Embrace transparency. Share company achievements and plans regularly to foster trust and build strong alliances.
Personalize your approach to each shareholder. Recognize their unique interests and cater to them individually to create a sense of valued partnership.
Maintain consistent communication. Regularly update shareholders on performance, strategies, and future plans to keep them engaged and informed.
Clearly communicate the value proposition. Show how each shareholder's participation contributes to the company's success and aligns with their interests.
Empower shareholders with knowledge. Educate them about the value of their equity to build their understanding and participation.
Align your vision with theirs. Collaborate to establish shared long-term goals and foster a sense of unity in purpose.
Be proactive in problem-solving. Demonstrate transparency and decisiveness in tackling challenges to maintain trust and confidence.
By following this blueprint and prioritizing these key insights, private companies can cultivate strong, long-term relationships with their shareholders, leading to a more secure and successful future.
Weekly Board Topic:
Navigating New SEC Cybersecurity Laws
Back in July, the SEC announced new rules on cybersecurity disclosures. Now, while these new disclosure requirements currently target publicly-listed companies, it’s no less important for private company boards to understand.
The new rules essentially require listed U.S. companies to quickly disclose cybersecurity breaches, as well as provide annual company governance disclosures on cybersecurity measures.
We talked in the last issue about the importance of embracing AI, but in an increasingly digital business landscape, it’s important to recognize that new technologies come with inherent risks that must be considered.
Lee Westerfield previously talked about this on The Modern CFO podcast, but went another step forward in saying that cybersecurity is as much about “putting a perimeter and barriers and policies [to] protect the value and intellectual property and privacy at the perimeters of a company's information systems” as it is, “disincentivizing cybercrime.”
For private company boards who want to stay transaction-ready, the need for a clear cybersecurity policy is paramount.
- Engaged Senior Leadership: An active, informed, and supportive board can help enhance the effectiveness of cybersecurity measures.
- Proactive and Transparent Communication: Guidelines and frameworks should be made known to internal and external stakeholders, ensuring alignment when a cyber threat may occur.
- Training and Testing. Many companies, both public and private, annually conduct internal tests to evaluate the company’s response capabilities.
- Talk to Experts: It’s important to understand the full scale of cybersecurity risks within the organization and what extends beyond the business.
Staying informed and taking a proactive approach puts private company board members in a position to navigate the challenges posed by the new SEC cybersecurity rules and fortify their organizations against these threats.
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Happy holidays! We’ll see you in the new year!