Industrial

With national security central to Trump’s policy agenda, sanction compliance directly ties into Industrial companies’ boards of directors’ duties of care and loyalty. As stewards of the company, directors must ensure responsible and ethical operations, which include strict adherence to sanctions. Failing to comply can expose the company to significant legal and reputational risks, which will ultimately harm shareholders’ interests. Therefore, it is imperative that boards fully understand the sanction compliance requirements relevant to their company.

In today’s dynamic global corporate regulatory landscape, ESG reporting for Industrial companies goes beyond regulatory compliance—it plays a pivotal role in building trust, driving consumer and investor decisions, and securing long-term business viability. However, with expected regulatory upheaval under Trump 2.0, boards should press management teams to reconsider their voluntary reporting strategies. Boards must strategically navigate voluntary versus non-voluntary disclosures, not only to meet current regulatory demands but also to anticipate and shape future standards, turning ESG efforts into a competitive advantage.

While Industrial companies have set decarbonization goals, there is still work to be done to integrate decarbonization strategies across sourcing, assembly, production, transportation, and product marketing. Regulators and customers are pushing for greater transparency for both emissions disclosures and other ESG metrics (embodied carbon, recyclability, biodiversity, fair trade, human rights, etc.) This pressure has started in Europe and continues to grow in North America, Australia, Singapore, and beyond. Board members should understand key drivers around this trend and determine how their organizations should manage reputational and greenwashing risk with carbon labelling.

Data privacy has become a critical issue in the boardroom, especially within the Industrial sector. While awareness varies, recent high-profile data breaches and privacy scandals have heightened board-level attention to these matters. The reputational and financial risks are significant, especially as these risk are no longer insurable. Accordingly, boards have begun recruiting directors with expertise in technology and data privacy as well as improving enterprise data governance and protection (as part of ESG practices). Notably, younger board members often bring a heightened sensitivity to digital and privacy risks, contributing to a more balanced and informed board composition.