Society public company members across sizes and industries responding to the most recent Society / Deloitte Board Practices Quarterly survey: “Evolving lines of responsibility between the board and management” provided insights on the roles and responsibilities of their board.
Among the takeaways:
Board leadership structure (n=100)—A plurality of companies represented by respondents have a separate CEO and independent board chair (43%) and a lead independent director (46%).
Board independence (n=99)—A plurality of boards represented by respondent companies are composed entirely of independent, non-executive directors other than the CEO (42%), while 36% of boards are represented by more than 75% independent, non-executive directors.
Establishing board v. management responsibilities (n=98)—Nearly all companies (95%) rely on their governance documents (e.g., corporate governance guidelines) to establish a mutual understanding among the board and management of their respective roles and responsibilities. A majority of companies also or instead rely on new director orientations, regular board performance evaluations, and director education. More than half of companies with a lead independent director use a lead director role description.
Board approval authority (n=71)—Among a robust list of enumerated activities, no board or board committee review or approval is typically required for C-suite travel and expense policies, stakeholder engagement policies or strategies, annual workforce health and wellness plans, interaction with workforce below the C-suite, or workforce vacation/PTO policies. By contrast, a majority of companies require full board approval for the annual budget (75%); C-suite and workforce code of conduct/ethics (69% and 64%, respectively); and C-suite selections, appointments, and terminations (51%). (The latter answer choice deliberately focused on non-CEO selections, appointments, and terminations.)
Board involvement in strategy (n=66)—Most boards are always or regularly involved in their company's multiyear strategic plan development/update (94%), M&A strategy development/update (85%), and sustainability strategy development/update (52%).
Board involvement in human capital (n=66)—More than two-thirds of boards are always or regularly involved in management (other than CEO) succession planning. (This answer choice deliberately focused on non-CEO succession planning.)
Board involvement in operations (n=63)—Regular board involvement in enumerated operations-related activities is rare or uncommon, as shown here:
Board involvement in risk management/mitigation (n=62)—Most boards are always or regularly involved in the company's annual risk management plan development/update (79%), shareholder activism response (66%), and risk profile development/update (65%).
Responses tended to vary by company size. Access the survey results by company demographic here. Small-cap and private company findings were omitted from the report and the accompanying demographics reports due to limited respondent populations; however, members may access those results by emailing Randi at rmorrison@societycorpgov.org.
Access additional resources on our Board Practices/Governance Practices and Director/Officer Duties & Liabilities pages.