PwC's newly-released report on its 2019 Annual Corporate Directors Survey of 734 public company directors (21% female/79% male) reveals how board practices are evolving in response to changes in the macro environment and societal pressures in the context of boards' efforts to remain focused on their core oversight responsibilities.
Noteworthy findings include:
- Peer perceptions - Although nearly half (49%) of respondents overall said that, in their opinion, at least one of their fellow directors should be replaced (up 4% from last year), respondents' bases for criticism of fellow directors are extremely noteworthy for what they do NOT include:
- Board/director evaluations - More than 60% of respondent boards conduct annual individual director evaluations. 72% of respondents (compared to 49% in 2016) said their board made changes in response to their most recent evaluation process - most commonly by adding additional expertise to the board.
- Risk oversight - Boards are evidencing their focus on crisis preparedness and cybersecurity in the form of increased involvement in management's response planning, risk mitigation tactics, and utilization of outside expertise. For example, as to crisis management generally, 56% of respondents say their board has participated in tabletop exercises/crisis management scenarios compared to just 28% last year, and 71% of respondents (compared to 39% last year) say their board/committee discussed the results of an outside cybersecurity expert's evaluation/testing.
- ESG - 56% of directors say institutional investors devote too much attention to E&S issues - just 5% say not enough. More broadly, it appears directors are considering ESG issues primarily in the context of their ERM discussions, as shown here:
Also noteworthy: Nearly 80% of respondents agree very much (53%) or somewhat (26%) that proxy advisory firms should be regulated by the SEC.
See also PwC's top findings; a breakout of key responses by respondent gender; "Directors tiring of diversity and ESG focus, survey finds" from Corporate Secretary; and additional information & resources on our Board Practices/Governance Practices page. This post first appeared in the weekly Society Alert!