PwC's "2023 Annual Corporate Directors Survey" (PwC’s key takeaways online here) of 619 public company directors (28% female/72% male) across industries reveals how board practices are evolving in response to changes in the macro environment and societal pressures in the context of efforts to remain focused on core oversight responsibilities.
Noteworthy findings include:
Board composition/diversity—Financial expertise on the board leads many other enumerated skills, competencies, and attributes by a wide margin in terms of its perceived importance, with 90% of respondents characterizing it as very important. This compares to 28% that identified cyber risk expertise as very important and just 11% that identified environmental/sustainability expertise as very important, as shown here (n=611-616):
Most boards have taken actions over the past two years on board diversity—most commonly, disclosing information about the board’s diversity in the proxy statement (71%) and/or replacing a retiring director with a diverse director (66%).
Peer perceptions—Although 45% of respondents overall said that, in their opinion, at least one of their fellow directors should be replaced (compared to 48% last year), respondents' bases for criticism of fellow directors are extremely noteworthy for what they do NOT include (n=607):
- Board/director evaluations—61% of respondents said their board made changes in response to their most recent evaluation process— most commonly by adding additional expertise to the board (n=600). Half of respondents’ boards conduct individual director evaluations (n=601).
- Board effectiveness—A majority of respondents reported favorably on their core board practices, as shown here (n=603):
- ESG—A majority of respondents said that ESG issues are part of the board's ERM discussions (59%); are linked to the company’s strategy (54%); and are regularly on the board’s agenda (52%), and that the board is sufficiently prepared to oversee forthcoming mandatory ESG disclosures (51%). However, less than half (42%) believe ESG issues have a financial impact on the company’s performance and just 19% believe their board needs more reporting on ESG-related measures (n=531).
- Cybersecurity—Nearly two-thirds of respondents said their boards had increased the agenda time devoted to cybersecurity over the past 12 months and at least half affirmed their board’s receipt of all of the following cybersecurity-related metrics/data/information other than budget (n=536):
