Michael Ling reflects on the challenges that directors face today and his experience at the 2022 Salzburg Global Corporate Governance Forum
On October 13, Salzburg Global Seminar hosted its latest Corporate Governance Forum. This year, the topic was Global Disruption and Uncertain Horizons: How can Boards Navigate New Risks. The Forum participants examined the role directors play in addressing converging crises and debated their changing roles and responsibilities in today’s times of uncertainty.
Salzburg Global spoke with Michael Ling, deputy company secretary for CLP Holdings Limited, about his thoughts on the challenges that directors face today and his experience at the Forum.
Salzburg Global: What are the main challenges that directors face today?
Michael Ling: “I think directors are most concerned about any blind spots. Whether it's an American board, German board, European board or Asian board, there is that inherent information asymmetry between the board and the management, or even sometimes not just senior management, but management more broadly. […] And I think just going to one of the comments made in the earlier session about 'how do directors spot those red flags?' or 'how can directors make sure that there isn't anything materially looming as a risk in those blind spots?' I would say that would be the most concerning part.
“And I think to address that, is conversations with management, conversations with different levels of management, understanding the business, asking those tough questions and having that challenging and constructive and inquiring mindset. […] because it could be blind spots about social media backlash, it could be blind spots about making false kind of ESG claims, as we were discussing. But I think more broadly, it's making sure that, 'are they comfortable with what's being made available by management?' And also, I think another way to mitigate that […] is the culture. Is there a culture of good news reporting? Is management only interested in reporting good news? It can't be all cozy and lovely all the time, and if that's the case, that's a red flag.”
SG: What is something that people in your industry don't talk about?
ML: “I’m in the power industry, so I think the power industry in our part of the world... we're making our own efforts in terms of the transition away from fossil fuels. But I think one area that isn't talked about is the costs associated with that and the costs to corporates and the cost to ultimately the customers. I think a lot of people realize, a lot of people know that it is the right thing to do, to transition away from fossil fuels and there's a timeline for that. But I think there isn't enough conversation about the costs associated with that.”
SG: What do you hope to take away from the Forum?
ML: “The different perspectives. I think that is one of the most valuable parts of this conference and the setting. You're not only hearing views from people like yourself, you're hearing views from directors or management, or everyone in that whole ecosystem that's working in that board and corporate space. I think that's most valuable and it’s that interesting mix of people and that diversity that makes coming to Salzburg very, very special every time.”
