In a survey of more than 600 C-suite executives by PwC and The Conference Board, most rate their board of directors’ overall effectiveness as middle of the road: 56% say their boards are doing a fair job, while only 29% rate it as good or excellent.
The survey also found some positive feedback, with boards receiving high marks for their firm grasp of corporate strategy (85% of respondents), key business risks and opportunities (72%), and the competitive landscape (62%). Moreover, 68% are confident that their boards effectively engage with shareholders.
But executives have concerns about:
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Who is on the board: 89% want one or more of their directors replaced;
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What knowledge they bring to discussions: 50% say their boards do not understand the impact of digital technologies and 40% say they do not understand the company’s climate strategy; and
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How they engage in the boardroom: 33% say their boards ask probing questions.
The report also offers practical guidance on how boards can improve their performance, with the overarching recommendation being that boards need to partner closely with the C-suite in improving board effectiveness. Survey results and insights include the following:
Key findings
1) Board effectiveness: Overall performance
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Most executives rate their boards’ overall effectiveness as middle of the road
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In traditional areas of oversight, boards continue to perform well
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In more specific areas of oversight, there is room for improvement
“US corporate boards typically assess their effectiveness through their annual self-evaluations of board, committee, and increasingly, individual director performance. While CEOs typically participate in that process as board members, the rest of the C-suite is often not involved. Boards could benefit from seeking input from the Chief Financial, Legal, and Human Resources Officers, and on a rotating basis from other C-suite executives, about board composition,…
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