PwC's report on its "2020 Annual Corporate Directors Survey" of 693 public company directors (24% female/76% male) 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:
- Peer perceptions: Although nearly half (49%) of respondents overall said that, in their opinion, at least one of their fellow directors should be replaced (on par with last year), respondents' bases for criticism of fellow directors are extremely noteworthy for what they do NOT include:
- Board/director evaluations: 72% of respondents said their board made changes in response to their most recent evaluation process - most commonly by adding additional expertise to the board.
- Shareholder engagement: 58% of respondents said that a member of their board (other than the CEO) had direct engagement with investors during the past 12 months.
- ESG: 55% of directors say ESG issues are a part of the board's ERM discussions, and 51% say their board has a strong understanding of ESG issues impacting the company.
- Social purpose: 85% of directors very much or somewhat agree that social purpose and company profitability are not mutually exclusive.
- Virtual board/committee meetings: The majority of respondents rated the level of director engagement in their COVID-prompted virtual board/committee meetings as excellent.
- Long-term COVID impacts: 71% of directors believe COVID-19 will significantly increase employees' ability to work remotely.
There are a number of key findings relating to board diversity that are noteworthy, including the persistent view among a plurality of surveyed directors that a lack of qualified candidates impedes efforts to increase board diversity; however, an equal percentage of respondents cited long-serving directors' reluctance to retire. Directors commonly support policies to interview a diverse slate of candidates (à la the Rooney Rule) and to direct their search firms to offer a diverse slate of candidates to achieve board diversity in lieu of, e.g., legislative mandates.
See key findings by topic here and these articles from Journal of Accountancy and Pensions & Investments. This post first appeared in the weekly Society Alert!