Corporate Governance In Finance

I was recently reflecting with a few CEOs and Directors on a simple question: 𝗪𝗵𝘆 𝗱𝗼 𝘀𝗼𝗺𝗲 𝗕𝗼𝗮𝗿𝗱𝘀 𝗮𝗱𝗱 𝗿𝗲𝗮𝗹 𝘃𝗮𝗹𝘂𝗲, 𝘄𝗵𝗶𝗹𝗲 𝗼𝘁𝗵𝗲𝗿𝘀 𝗰𝗿𝗲𝗮𝘁𝗲 𝗻𝗼𝗶𝘀𝗲? PwC’s 2025 Board Survey found that 𝗼𝗻𝗹𝘆 𝟯𝟮% 𝗼𝗳 𝗲𝘅𝗲𝗰𝘂𝘁𝗶𝘃𝗲𝘀 𝗯𝗲𝗹𝗶𝗲𝘃𝗲 𝘁𝗵𝗲𝗶𝗿 𝗕𝗼𝗮𝗿𝗱𝘀 𝗵𝗮𝘃𝗲 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗲𝘅𝗽𝗲𝗿𝘁𝗶𝘀𝗲. Very often, the difference is not the quality of the Directors alone. It is also not about adding more people or copying a textbook model. It is the way the Board is structured: Align the Board size, skills, independence and committees design with the company’s strategy, ownership model and risk profile. Here are few thoughts I would like to share: ✅ 𝗙𝗶𝘁 𝘁𝗵𝗲 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝘁𝗼 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝗼𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝗺𝗼𝗱𝗲𝗹   • Do not build a Board made only of shareholder representatives and executive Directors   • Add Independent Directors and create the right balance across the different categories   • Independence must create value through challenge, judgment and objectivity ✅ 𝗗𝗲𝗳𝗶𝗻𝗲 𝗰𝗹𝗲𝗮𝗿 𝗿𝗼𝗹𝗲𝘀, 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝘀𝗶𝘇𝗲 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝘀𝗸𝗶𝗹𝗹𝘀 𝗺𝗶𝘅   • Separate clearly the roles of the Chair, CEO and Committees to avoid overlap and confusion   • A Board that it too small can limit diversity of thinking. Too large can slow discussion and decision-making   • Build the Board around the capabilities the business needs now, not the ones it needed five years ago ✅ 𝗦𝘂𝗽𝗽𝗼𝗿𝘁 𝘁𝗵𝗲 𝗕𝗼𝗮𝗿𝗱 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲𝘀   • Boards today face too many topics and challenges for everything to sit at Board level   • For some companies, Audit, NRC and Risk may be enough   • Others may need added focus on technology, AI, cyber, transformation or M&A ✅ 𝗨𝘀𝗲 𝗮 𝗿𝗶𝗴𝗼𝗿𝗼𝘂𝘀 𝗽𝗿𝗼𝗰𝗲𝘀𝘀 𝘁𝗼 𝘀𝗲𝗹𝗲𝗰𝘁 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗗𝗶𝗿𝗲𝗰𝘁𝗼𝗿𝘀   • It takes much longer to assess a Director than a CEO because interaction is less frequent   • Invest the time to assess capability, style, availability and genuine motivation to add value   • Get professional support to screen many potential candidates thoroughly The key lesson? A Board structure is effective when it helps the Board spend more time on judgment, strategy and value creation. 💡 𝗜𝗳 𝘆𝗼𝘂 𝗿𝗲𝗱𝗲𝘀𝗶𝗴𝗻𝗲𝗱 𝘆𝗼𝘂𝗿 𝗕𝗼𝗮𝗿𝗱 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝘁𝗼𝗱𝗮𝘆, 𝘄𝗵𝗮𝘁 𝘄𝗼𝘂𝗹𝗱 𝘆𝗼𝘂 𝗰𝗵𝗮𝗻𝗴𝗲? #BoardDirectors #CorporateGovernance #Leadership #BoardEffectiveness #Strategy

If I had to rebuild a nonprofit board from scratch today, I wouldn’t start with donations, instead I would start with: Decisions. Because most boards aren’t underperforming due to lack of funding. They’re underperforming due to lack of firepower. Here’s exactly how I’d build a board that acts more like a founding team: 1. Recruit for wisdom, not wallets Stop saying: “We need help fundraising.” Start saying: “We’re assembling a strategy team to scale [your mission].” You’ll attract operators, not spectators. Mission-obsessed thinkers instead of passive check-writers. 2. Treat them like co-founders, not cheerleaders Forget the tired “give, get, or get off.” Do this instead: • Assign 90-day micro-committees • Match board seats to real functions (finance, policy, partnerships, etc.) • Give them a problem to solve, not a deck to watch People join boards to build. Not just vote. 3. Build range, not just representation Diversity isn’t only about background. It’s also about capability. Your dream board includes: • A CFO who’s saved a company from collapse • A founder who’s scaled under pressure • A comms expert who can turn your work into headlines • A policy insider who’s worked the system from the inside That’s how you make your board crisis-proof. 4. No more status updates Board meetings should feel like war rooms, not weather reports. • Send a pre-read • Ask one bold question: “What’s blocking our growth this quarter?” • Leave with actions, not applause People thrive when they’re pushed to think, not just sit. 5. They don’t need to raise money. They need to open doors If your plan is “ask their friends for $500”… you don’t have a plan. Instead: • Train them to broker strategic intros • Have them host private briefings • Leverage their name in the room • Get them active on LinkedIn Smart boards don’t just support your work. They scale it. 6. Culture over bylaws The best boards run on: • Candor over comfort • Curiosity over control • Momentum over perfection You can’t build a high-impact board on politeness and PowerPoints. In 2025, a board should feel less like a committee. And more like a startup team. Not a group of donors. A circle of builders. Comment “Board” and I’ll send you a free resource to help you build one. With purpose and impact, Mario

"As agents become more capable and widespread, so do their risks. They can amplify threats that cross national borders, such as interference in elections or disruptions to critical infrastructure, and exacerbate human rights concerns, from privacy violations to limits on free expression. Addressing these challenges requires more than national regulation. It requires global governance. This paper examines how these potential risks can be managed through foundational global governance tools that are non-AI-specific in nature and universal in scope: international law, non-binding global norms, and global accountability mechanisms. We explore how these can be used, where they fall short, and what must change to strengthen them. Key Takeaways ▪️Existing international obligations matter. Governments must respect sovereignty, prevent cross-border harms, and protect human rights when using or regulating AI agents. ▪️Companies are part of the equation. While not directly bound by international law, firms benefit from aligning with global standards and calling out unlawful state behavior. ▪️Global accountability channels exist. International institutions, particularly the UN system, provide avenues for oversight and redress, alongside other legal and normative mechanisms Important gaps remain. Weak enforcement, unclear liability, and conflicting domestic frameworks risk undermining global governance. Why It Matters ▪️For governments: Upholding international law will be central to stability and cooperation as AI agents spread. ▪️For companies: Respecting global rules strengthens trust with users, investors, and regulators. ▪️For civil society and individuals: Demanding accountability ensures AI development serves the public interest." Partnership on AI Talita Dias Jacob Pratt

Board minutes are boring. Until the regulator, the buyer or judge reads them. Then suddenly they are the most important document in the room. The Crispin Odey story in the FT this week demonstrates why. He fired his executive committee twice. Installed himself as the sole member. Then held a meeting alone - with minutes recording an attendee who says they were not even there, with comments attributed to them that they say never happened. That is not a typo - it is alleged falsification of a legal record. Under s.248 Companies Act 2006, every UK company must record directors' meeting proceedings and keep them for at least 10 years. Fail and every director in default commits a criminal offence. But the stakes have quietly got higher. Since the Economic Crime and Corporate Transparency Act 2023, boards can defend against the new failure to prevent fraud offence by showing proper prevention procedures. Good minutes are part of that evidence base. Most boards have not connected those dots yet. And minutes disclosed to the CMA or FCA can be shared with overseas regulators. Your private boardroom discussion can end up in front of a regulator in a country you have never set foot in. What I look for in M&A due diligence Board minutes are where the real story lives. I check for: – Who authorised that acquisition, loan or dividend – Was the authorisation what was required by law (you'd be surprised how often it isn't!) – Whether conflicts were declared and managed – Whether directors considered solvency before distributions – Evidence of genuine debate, not rubber-stamping – How the board handled problems when they arose Good minutes can underwrite a valuation. Bad ones can be part of a thousand papercuts that kill deals by telling the story of poor governance. What to do when the draft minutes leave things out This is where most directors are far too passive. They get a draft - they skim it, approve it, move on. If the draft omits something that matters, ask for the change promptly and in writing. Especially if it leaves out: – A material concern you raised – Genuine challenge, not just consensus – A conflict disclosure – The reasoning behind the decision, not just the outcome – Your dissent or abstention Minutes should not be a verbatim transcript but they need to reflect what actually happened - not the sanitised or the politically convenient version. The real one. 𝗢𝗻𝗰𝗲 𝘁𝗵𝗲 𝘁𝗶𝗱𝘆 𝗱𝗿𝗮𝗳𝘁 𝗵𝗮𝗿𝗱𝗲𝗻𝘀 𝗶𝗻𝘁𝗼 𝘁𝗵𝗲 𝗳𝗶𝗻𝗮𝗹 𝗿𝗲𝗰𝗼𝗿𝗱, 𝗵𝗶𝘀𝘁𝗼𝗿𝘆 𝗯𝗲𝗰𝗼𝗺𝗲𝘀 𝘄𝗵𝗮𝘁𝗲𝘃𝗲𝗿 𝘁𝗵𝗲 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁 𝘀𝗮𝘆𝘀 𝗶𝘁 𝘄𝗮𝘀. If you doubt that, read the Odey coverage again. Board minutes look dull and they feel procedural. But when things go wrong they are the difference between "The board carefully considered this" and "The board, apparently, considered nothing." Boring documents save careers. 👉 What is the worst board minute mistake you have seen - too thin, too polished, or simply wrong?

🌍✨ Diving into the world of #sustainabilitymanagement, one study at a time. Join me as I explore interesting research by brilliant minds, uncovering insights that could shape our future. 🌱🔍 Today: "The Effects of Mandatory ESG Disclosure Around the World", published recently in the Journal of Accounting Research (see DOI at the end). Governments around the world are increasingly requiring companies to disclose their environmental, social, and governance (ESG) activities. But do these regulations lead to meaningful change? A new global study examines the impact of mandatory ESG reporting and reveals important insights. The study finds that when companies are required to disclose ESG efforts, investors gain clearer insights, reducing uncertainty and improving stock market liquidity. This means shares can be bought and sold more easily, making markets more stable. Regulations are most effective when enforced by government institutions rather than stock exchanges. Additionally, requiring full compliance rather than allowing companies to simply explain why they do not comply results in better outcomes. The impact of mandatory ESG reporting is most significant in countries where corporate transparency was previously weak. This suggests that regulation can help create a more level playing field for investors and stakeholders. For investors, companies with strong and transparent ESG practices are likely to be more stable and trustworthy. Policymakers should ensure that ESG regulations are not just implemented but also properly enforced. Consumers and stakeholders can play a role by demanding transparency and holding companies accountable. As ESG considerations become central to investment and business strategy, mandatory disclosure may be a key step toward more responsible and sustainable corporate practices. These findings are particularly relevant in light of the current backlash against the European Corporate Sustainability Reporting Directive (CSRD). As debates continue over the burden of ESG reporting requirements, this study provides evidence that well-enforced disclosure rules can enhance market transparency, reduce investment risks, and create more stable financial markets, countering arguments that such regulations are merely bureaucratic obstacles. Congratulations to Philipp Krueger, Zacharias Sautner, Dragon Yongjun Tang 汤勇军, and @Rui Zhong for this inspiring work! The picture shows the title page of the article (DOI: 10.1111/1475-679X.12548)

Cambridge Centre for Alternative Finance, Cambridge Judge Business School - The Next Frontier in Digital Asset Market Infrastructure: Lessons from Digital Public Infrastructure (DPI) - The latest report from CCAF maps the global transformation of market infrastructure through the lens of DPI — from real-time payments to digital IDs and consent-based data sharing. - The implications for the future of digital assets and tokenized finance are massive. Five Insights on the Infrastructure Shaping Digital Markets: 1. DPI Meets Traditional Financial Market Infrastructure (FMI) - DPI like India’s UPI and Brazil’s Pix are converging with FMIs such as RTGS and clearing houses — redefining how value moves in a digital economy. - The ability for non-banks to directly settle in central bank money, as seen in Brazil’s Pix, shows how market rails are opening up. 2. Modular & Open-Source Infrastructure as a Competitive Edge - Open APIs, modular infrastructure, and consent-based data sharing create composable financial ecosystems. - Think of it like Lego blocks for finance — enabling fintechs, banks, and DeFi protocols to build faster, more tailored solutions, but governance and interoperability will be key to prevent fragmentation. 3. Emerging Markets Are Proving Grounds for Infrastructure Innovation - With 113 jurisdictions deploying at least one DPI pillar, emerging markets like India and Brazil are setting global precedents. - For example, India’s UPI processes over 17 billion transactions monthly, outpacing even Visa and Mastercard domestically 4. Regulatory Coordination is Lagging Infrastructure Development - The report warns of a regulatory "knowledge gap" — the pace of market infrastructure innovation is outstripping regulators' capacity to oversee risks like data misuse, concentration, and exclusion. - Coordinated, cross-border regulatory frameworks will be critical as DPI and tokenised markets mature. 5. DPI as a Catalyst for Tokenisation and Digital Assets - By embedding digital identity, instant payments, and secure data sharing, DPI creates the foundation for broader adoption of tokenised assets, programmable finance, and embedded financial services. - Without such infrastructure, digital asset markets remain siloed and friction-laden. Real-World Parallel - In tokenisation, the European Union’s DLT Pilot Regime is laying new rails for trading digital securities — but it’s jurisdictions with mature DPI that will have a competitive advantage in scaling these markets. So What? - For digital asset innovators, policymakers, and financial institutions: DPI is not just about financial inclusion — it’s the infrastructure layer for the future of digital markets. - The race is on to build, govern, and standardise this infrastructure globally — those who lead will define the next era of finance. Great work Pavle Avramović, Sanya Juneja, Yue Wu, krishnamurthy S and Bryan Zhang

Joining the Board of an Indian Listed Company Serving on the board isn’t just an honor; it’s a responsibility defined by robust governance norms, especially those outlined by the Ministry of Corporate Affairs (MCA) and SEBI regulations. Let me shed light on what this role entails in an Indian listed company Board Composition: Under the Companies Act, 2013 and SEBI (LODR) Regulations and MCA, Qualifications & Eligibility for individuals is as follows : Unique Identification: All directors must obtain a Director Identification Number (DIN) from the MCA. Independent Director Criteria: -Must not be a promoter or related to promoters. - No pecuniary relationship with the company (except allowable fees/remuneration). - Possess relevant experience/qualifications, integrity, and reputation in fields like law, finance, governance, technology, HR etc. - Should be listed in the MCA’s independent directors databank and clear a proficiency test, unless exempted based on experience - Tenure: IDs can serve up to two consecutive five-year terms, followed by a three-year cooling-off period - Selection: All board appointments must be ratified by shareholders within three months or the next general meeting Key Steps towards becoming an independent board member : - Build expertise and upheld ethical standards in your domain. - Pursue the DIN and complete the requisite MCA formalities. - Register and clear the independent director’s proficiency assessment/exam. - Build strong networks and contribute actively to professional circles. - Commit to lifelong learning around corporate law, SEBI and MCA updates, governance practices and Technology evolution For Aspiring Board Members - Stay Updated: Regularly review Companies Act amendments, MCA & SEBI circulars. - Develop Governance Skills: Consider governance courses and register with MCA/IICA for independent directorship - Focus on Diversity:Support gender and experience diversity on boards. - Understand Your Duties: Board members hold fiduciary responsibility and must comply with evolving governance norms. - Keep Learning : Update your skills and knowledge on technology, risks, HR practices, business and processes of the relevant industries #CorporateGovernance #ListedCompany #BoardDirectors #MCA #SEBIRegulations #Leadership #WomenOnBoards #technology #HR #independentdirectors If you’re interested in the journey to board leadership, comment and follow me – happy to share more insights!

Last week, I explained the difference between governance and advisory boards for organisations. What’s the difference for you as an individual? Governance board roles are about: ⚖️ fiduciary responsibility 🧾 formal oversight 📊 accountability to shareholders or stakeholders 🛡️ protecting long-term value You are legally accountable. You vote. You carry liability. You are part of the formal decision-making structure. This path may suit you if: 🏗️ You’re comfortable with responsibility and risk 📚 You enjoy oversight and stewardship 🔍 You’re strong in governance, compliance and risk management 🏛️ You want to influence at a structural level Advisory board roles are about: 🧠 expertise and perspective 🎯 strategic challenge 🚀 growth acceleration 🤝 influence without authority You do not vote. You are not legally liable. You influence through insight, not position. This path may suit you if: 💡 You enjoy problem-solving and strategy 🧭 You want flexibility 🧩 You’re building a portfolio career 🌱 You prefer impact without formal governance responsibility Advisory roles are often more fluid, project-based and can be created rather than just relying on applications. Why consider one, the other… or both? Some professionals: 💡 Start in advisory to build board experience 💡 Move into governance once they’re comfortable with fiduciary duties 💡 Stay purely advisory by choice 💡 Combine governance and advisory in a portfolio career If you are considering an advisory or governance board career path, ask yourself: ❓ Do I want accountability or influence? ❓ Do I want structure or flexibility? ❓ Do I want formal authority or strategic impact? If you’re exploring board work and unsure which path fits your experience and ambitions, book a call and let's discuss in more detail - https://lnkd.in/gdeQW-MC

Serving on a nonprofit board is more than a title or an occasional meeting. It is an active leadership role with real responsibility and real impact. Effective nonprofit boards understand and embrace a core set of responsibilities that guide their work and protect the organization’s mission. Establish the organization’s vision, mission, and purpose Board members are stewards of why the organization exists and where it is going. This responsibility anchors strategy, priorities, and decision making. Select, support, and review the chief executive Hiring the right leader and supporting their success is one of the board’s most critical duties. Clear expectations, partnership, and regular evaluation matter. Support organizational planning Boards help shape direction by engaging in strategic planning and ensuring the organization is positioned for long term sustainability and impact. Monitor and manage financial resources Board members provide oversight of budgets, audits, investments, and financial policies to ensure responsible stewardship of resources and long term viability. Serve on committees Committees allow board members to go deeper on key areas of governance and contribute their expertise more effectively between full board meetings. Recruit new board members Boards are responsible for their own strength and composition. Thoughtful recruitment ensures the right mix of skills, perspectives, and lived experience. Give and generate financial resources Board members lead by example through personal giving and by helping connect the organization to philanthropic support and community resources. Spread the word about the organization Boards serve as ambassadors, sharing the mission, impact, and value of the organization within their personal and professional networks. Attend board and committee meetings Presence matters. Preparation, participation, and accountability are essential to effective governance. Ensure legal compliance Boards ensure the organization follows applicable laws and regulations, adheres to its governing documents, and remains faithful to its mission. Be free of conflicts of interest Board members must act in the best interest of the organization at all times, disclose potential conflicts, and avoid decisions that benefit personal or outside interests. When boards take these responsibilities seriously, nonprofits are stronger, more credible, and better positioned to serve their communities. Great boards do not manage the organization. They govern it with care, commitment, and accountability. The Five Tool Fundraiser Fulcrum Nonprofit Leadership (Fulcrum) AltruList

What does the 𝗺𝗼𝗱𝗲𝗿𝗻 𝗳𝗶𝗻𝗮𝗻𝗰𝗲 𝗹𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝘁𝗲𝗮𝗺 actually look like? Most people still imagine finance as a single function focused on accounting and reporting. In reality, the finance organization today is a 𝘁𝗲𝗮𝗺 𝗼𝗳 𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗶𝘇𝗲𝗱 𝗹𝗲𝗮𝗱𝗲𝗿𝘀, each responsible for a critical part of the company’s financial performance. At the center sits the 𝗖𝗙𝗢, responsible for financial oversight, strategic planning, resource allocation, risk management, and compliance. Supporting the CFO is a leadership team typically covering areas such as: • 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝗹𝗶𝗻𝗴 – financial reporting, policies, internal controls, and cost management • 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 – general ledger oversight, financial close, and regulatory compliance • 𝗙𝗣&𝗔 – forecasting, scenario analysis, and strategic decision support • 𝗧𝗿𝗲𝗮𝘀𝘂𝗿𝘆 – cash management, funding, investments, and financial risk • 𝗧𝗮𝘅 – tax compliance, strategy, and advisory • 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀 – communication with investors and financial markets • 𝗦𝗵𝗮𝗿𝗲𝗱 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 – efficient delivery of finance operations • 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 – partnering with the business on performance and decisions Each of these areas plays a different role. But the real impact comes when they work 𝗮𝘀 𝗼𝗻𝗲 𝗶𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗲𝗱 𝗳𝗶𝗻𝗮𝗻𝗰𝗲 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻. Treasury secures financial resilience. FP&A provides forward-looking insight. Accounting ensures trust in the numbers. Business finance helps leaders make better decisions. Together, they enable the CFO to focus on what matters most: 𝗗𝗿𝗶𝘃𝗶𝗻𝗴 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗰𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘃𝗮𝗹𝘂𝗲. How is your finance leadership team structured today?