2020 Outlook on Digital Transformation, ESG & Data Privacy

Dottie Schindlinger

2020 Outlook on Digital Transformation, ESG & Data Privacy

Listen to Episode 20 on Apple Podcasts

Guest: Amy Rojik, National Assurance Partner for BDO and Director of BDO’s Center for Corporate Governance and Financial Reporting

Hosts: Dottie Schindlinger, Executive Director of the Diligent Institute, and Meghan Day, Senior Director of Board Member Experience for Diligent Corporation

In this episode:

  1. How have boards evolved their responses to digital transformation? BDO’s survey notes significant progress in the area of strategy and room for improvement in cyber oversight.
  2. Why didn’t ESG and sustainability make a stronger showing? Complexity and competing priorities may be two big reasons.
  3. How do directors describe the level of diversity on their boards? The wording of this survey question yields some interesting responses.


From competing and volatile priorities to changing stakeholder demands, board oversight responsibilities have reached new heights of complexity—and this is particularly true in today’s era of cultural shifts, geopolitical tensions, changing regulations, and unrelenting technology disruption.

Each year for over a decade, assurance, tax, and financial advisory firm BDO has surveyed directors of public companies across market caps to get a feel for the landscape. What issues are keeping boards up at night? What changes are looming on the horizon?

In this episode, Amy Rojik from BDO shares findings—and surprises—from the firm’s 2019 survey: “The Board’s Direction: Steadying the Shop in Times of Turbulence.”

How have boards evolved their responses to digital transformation?

“I think we’re seeing boards making more progress in digitally transforming their businesses,” Rojik notes. In the 2019 survey, 68% of companies indicated having a digital transformation strategy in place—a significant improvement from the prior year’s figure of 53%.

Cybersecurity remains a dominant topic in board discussions, with 83% reporting an investment over the past year. Still, 39% of respondents they were somewhat or not at all familiar with their organization’s data breach response plan. While this is a “huge drop” from the 67% of a few years ago, Schindlinger notes, “It’s still 39%. Why isn’t that number in the teens?”

Rojik encourages board members to rely on their management and technology teams to report to them, then “trust but verify.” Success in this oversight role, and the changing nature of cybersecurity, will require continued education. “It’s not just something you can take a class in and say, ‘Okay. I know what I’m doing.’” 

“We’re encouraging all of the directors we engage with to ask pointed and direct questions of management about the risk management programs across the enterprise and then independently verify this information.”

– Amy Rojik, National Assurance Partner for BDO and director of BDO’s Center for Corporate Governance and Financial Reporting

Why don’t ESG and sustainability make a stronger showing?

In the year of the Larry Fink letter, Business Roundtable purpose statement, and rising profile of climate change and sustainability issues, almost two-thirds (65%) of directors said that sustainability and ESG disclosures may not necessarily help investors make more informed decisions. Sustainability and corporate stewardship did not even rank among the top three of respondents’ top board issues, and only 6% listed it as their most discussed issue. 

Rojik cites complexity and change as key challenges in this area. Environmental issues come with a growing number of international frameworks with which companies need to comply, Rojik explains, and larger companies operating on a global scale are leading the way. Conversely, in the “non-E” areas of “ESG,” there’s a lack of comparability in areas like culture and how an organization treats employees and suppliers.

Standards boards are trying to develop more cohesive metrics for sustainability across industries. In the meantime, “I think there’s confusion that hopefully won’t be mistaken for lack of interest,” Rojik says. “It just requires a really heightened level of education at the board level.” 

“I think we’re really good at focusing in on things we can actually measure. Cultural oversight is something that is harder to get your arms around.”

– Amy Rojik, National Assurance Partner for BDO and director of BDO’s Center for Corporate Governance and Financial Reporting

How do directors describe the level of diversity on their boards?

Roughly two-thirds (67%) reported a “high” or “moderate” level of diversity on their boards, which Schindlinger says “feels a little bit aspirational” in a governance landscape where the S&P 500 recently reached the milestone of one female board member on all boards.

According to Rojik, the survey question’s wording was intentional, aimed to account for diversity in thought, experience, perspective, and skills. “It sounds like a question an investor might ask,” Day observes.

In other findings:

  • 66% of directors are using skill set reviews as part of overall board refreshment
  • 46% are conducting diversity reviews
  • One-third of new board hires over the past year had digital expertise

Also in this episode…

Schindlinger and Day talk more about board diversity and cybersecurity. They also dish on the ongoing saga of Carlos Ghosn—and who might star in the inevitable “Nissan: The Movie.” (Perhaps “Succession” star and Golden Globe winner Brian Cox?)

Listen to Episode 20 on Apple Podcasts

Episode resources:

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Dottie Schindlinger

Dottie Schindlinger is Executive Director of the Diligent Institute, the governance think tank and research arm of Diligent Corporation. In her role, Dottie promotes the intersection of governance and technology as a recognized expert in the field.' She co-authored Governance in the Digital Age: A Guide for the Modern Corporate Board Director, '2019, John Wiley & Sons Publishers, and is creator and co-host of The Corporate Director Podcast, a fortnightly show featuring corporate directors sharing their stories about modern governance.''

Dottie was a founding team member of BoardEffect, a board management software platform launched in 2007 focused on serving the needs of healthcare, higher education & nonprofit boards. Prior to BoardEffect, she spent 15 years working in a variety of governance roles, including as a board support professional, consultant, trainer, board member, and senior executive. 'Dottie serves as the Vice Chair of the Board of the Alice Paul Institute, and is a Fellow of the Salzburg Global Seminar.' She is a graduate of the University of Pennsylvania.