Digital Proficiency of CEOs and Boards of Directors 

There is growing evidence that success in digital transformation requires leaders who are digitally competent. A recent article in the Harvard Business Review made two observations from other studies in this regard:

  • “Fewer than 25% of CEOs and about 12.5% of CFOs in the sample could be regarded as digitally proficient”
  • “companies with three or more digitally savvy directors on their boards reported 17% higher profit margins and 38% higher revenue growth than those with two or fewer directors.”

This requires more than a general awareness of technology strategy. It calls for a working, hands-on knowledge of how IT systems work. Check it out here. 
https://hbr.org/2021/11/todays-ceos-need-hands-on-digital-skills?utm_medium=email&utm_source=newsletter_daily&utm_campaign=dailyalert_notactsubs&deliveryName=DM162989

Planning a Vaccination Policy Rollout

The short-term status of the pandemic seems to be that it is abating, although there are other issues around new variants, unvaccinated people and rising cases in some areas. However, the general consensus seems to be that we need to begin restoring some normality to our working lives.

That means bringing people back into the office, whether on a full time, part time or hybrid basis. Each of the alternatives means that there will be more face to face contact. A vaccination policy is needed. And the policy will need to reflect protocols established by governments, but also corporate and personnel cultures. The policy would affect not only employees, but also customers and suppliers. The policy would address not only the vaccination requirements but also would address the question of whether testing is a permissible alternative. What kind of testing and how would it be administered and recorded?

Of course, the policy is only the beginning. Immediately there arises the matter of enforcement, as well as a host of privacy and ethical issues. HR also needs to be involved.

Data needs to be collected, managed, stored and decisions made as to reporting on any incidents connected to the governance and enforcement of the policy. Software is being rolled out for this purpose.

In short, it isn’t a simple matter. Deloitte has released an excellent paper providing guidance on effective rollout of vaccination policies. It can be found at https://www2.deloitte.com/ca/en/pages/public-sector/articles/vaccination-status-program.html

XBRL Proving Useful to Stakeholders for Corporate Reporting

On Nov 10, Commissioner Caroline Crenshaw of the US Securities and Exchange Commission (SEC) spoke at the XBRL US Investor Forum 2021: Data that Delivers. In her introduction, she said “XBRL has made it easier and less costly to extract, filter, compare, and analyze the information in SEC filings. XBRL facilitates the comparison of a company’s information across time periods, against other companies, and between data in SEC filings and other agency filings. It allows for faster and more sophisticated analysis by regulators, investors, and academics.”

XBRL converts financial reports into data that can be imported directly into analytical tools and made more useful to investors, the SEC, other regulatory agencies, academic researchers, and financial analysts, among others. Crenshaw also observed that “All of this user activity adds up to more market transparency and more efficient markets.” Among the advantages of XBRL she cited were that since the XBRL mandate, stock prices have become more reflective of company disclosures, and the SEC has been able to use XBRL data to ensure better investor protection.

As for the future, she said “we at the SEC should continue to investigate where else data structuring can improve our disclosure ecosystem.” These might include, for example, environment, social and governance (ESG) matters, and proxy voting by investment funds. She also considered greater use of the Legal Entity Identifier (LEI). “The inclusion of LEIs in XBRL data has the potential to increase the usefulness of these data in SEC filings in a number of ways – for example, consistently identifying relevant entities in supply chains, or linking information on an entity across multiple regulatory data sets,” she observed. “The ability to use LEIs in XBRL data only increases their potential utility for users of our data.”

These events are documented at https://www.xbrl.org/news/the-benefits-are-well-documented-and-extensive-commissioner-crenshaw-on-the-secs-xbrl-success-story/ and https://www.xbrl.org/news/changing-with-the-times-xbrl-us-investor-forum-reveals-value-of-structured-data/ .

 

CPA Founding Partner

Chartered Professional Accountants of Canada (CPA Canada), one of the largest national accounting organizations in the world, has chosen to become a founding partner of ThinkTwenty20.