Leveraging data from PwC’s annual corporate directors’ survey, "Board Effectiveness: A Survey of the C-Suite" from PwC and The Conference Board reveals the results of a fall 2024 survey of 520 public company C-suite executives on their views of the performance of their boards of directors as compared to (where relevant) directors’ perspectives on the same topics from PwC’s 2024 Annual Corporate Directors Survey (which we reported on here).
Notably, respondent executives gave directors higher marks compared to 2023 and much higher marks compared to 2022 on their boards’ ability to effectively engage with shareholders, guide the company through a crisis, and assess their own performance and make needed changes:
While the reported gaps in perspective between executives and directors are instructive, consistent with prior year surveys, they also reflect fairly significant variability in viewpoints among different management roles represented by survey, as demonstrated here, with 94% of CEOs and 72% of CFOs rating the overall effectiveness of their boards as excellent or good compared to just 18% of Marketing executives and 35% of respondents overall:
The foregoing notwithstanding, significant variations in perspective are noteworthy because they may themselves impede board effectiveness or be indicative of an opportunity to enhance board or management behaviors or practices.
Subject to the foregoing context and other board-management dynamics that are not apparent based on the survey data alone, other significant gaps in perspective on board effectiveness between directors and the C-suite include:
Board composition—93% of executives vs. 49% of directors believe at least one director should be replaced; 78% of executives compared to 25% of directors believe that more than two directors should be replaced.
In addition, the skill sets and/or expertise executives identified as priorities for new directors varied significantly from skill sets boards planned to add to their board, and executives’ priorities varied by functional area/role with, for example, CIOs/CTOs and GCs/CLOs prioritizing AI/Gen AI expertise; CAEs, CEOs, and COOs (among others) prioritizing International expertise; and CFOs and CMOs prioritizing Environmental/Sustainability expertise.
Boundaries—Also shareworthy: Nearly one-third of executives in 2024, compared to just 16% in 2023, think their boards overstep the boundaries of their oversight role. (See our prior report: “Society Members Speak! Board and Management Roles & Responsibilities.”)
The report includes suggested action items for executives and directors to help bridge the perspective and performance gaps. Complete survey findings are in the Appendix.