"What Directors Think - Navigating a Pivotal Year" from Corporate Board Member and Diligent Institute reveals the results of a survey of 400 public company directors about upcoming challenges and opportunities in the context of the significant events that unfolded in 2020.
Topping the respondents' near-term meeting agenda priorities are growth strategy/Covid recovery, M&A opportunities & divestitures, and capital allocation, as shown here:
Additional key takeaways include:
- Top concerns: Economy & GDP and COVID-19 tied for first place.
- Most important external influencers on corporate strategy: Covid-19 and related effects (78%)
- ESG:
- Directors say many of the "ESG" issues don't apply to them and that the "E," "S," and "G" should not be aggregated. As a result of aggregation, respondents say boards are viewing ESG as a check-the-box exercise rather than pursuing value creation opportunities.
- Directors expressed concern about "the potentially political agenda behind some of the ESG components they are asked to monitor," as well as the review, recommendation and rating processes of shareholder advisory firms.
- Some directors stressed that successful companies have always needed to consider the interests of all stakeholders and that the "new" focus on this topic is "overblown."
- Board composition:
- Diversity: 42% agree boards are doing enough to broaden their diversity; 34% are neutral.
- Skills: 82% say their board has a good or ideal composition as pertains to skill sets.
- Directors ranked skills/background diversity as the most important attribute for their next new board member.
- Board oversight:
- Most challenging issues: new technologies/innovation (42%) | culture (40% | cyber (37%)
- Importance: Financial performance oversight trumped fair employment practices and corporate citizenship (99% compared to 88% and 75%, respectively).
Respondents represented companies of all sizes and industries, committee representations, and board tenure.
Access additional resources on our Board/Governance Practices page. This post first appeared in the weekly Society Alert!