Evening Brief – 06.09.23

According to a recent survey of over 600 C-suite executives done by Big Four accounting firm PwC and The Conference Board, most assess their boards’ overall effectiveness as “middle of the road,” with 56% saying their boards are doing a fair job and only 29% saying it is good or excellent.

The survey yielded some encouraging results, with boards obtaining good grades for their understanding of corporate strategy (85% of respondents), important business risks and opportunities (72%), and the competitive landscape (62%). Furthermore, 68% believe their boards effectively connect with shareholders.

Most executives (60%) believe their boards will prioritize board diversity. However, only 20% believe their own boards are diverse enough, and 66% blame the lack of diversity on long-tenured directors’ unwillingness to leave.

Executives are eager to restructure their boards, with 89% feeling that at least one of their directors should be changed, and 75% believing that two or more should be replaced. This could be because C-suite is looking for directors with knowledge in developing challenges like cybersecurity and human capital management.

Traditional oversight areas such as finance and operations received high scores, with 67% of executives saying their boards have a strong financial understanding and 55% saying the same about operations expertise. ESG and climate were awarded low grades; 9% said their boards lacked ESG experience, while 47% said the same about climate expertise.