PricewaterhouseCoopers LLC's (PwC) Center for Board Governance released the final installment of its Annual Corporate Directors Survey, titled "Boards confront an evolving landscape." Topics addressed in the final installments are strategy and risk management oversight, as well as the regulatory and governance environment.
While the study includes responses from directors of public companies (70 percent of which have more than a billion dollars in annual revenue), it does provide good insight for companies of all sizes, public and private, mutual companies and tax exempt entities on governance trends and how boards are reacting to changes in the regulatory environment.
Some interesting findings of this year’s study include:
- 35 percent of directors now say someone on their board should be replaced (up 4 percent from 2012) with the top reasons being: age, lack of required expertise, poor preparation for meetings and overstepping boundaries of the director’s role.
- 48 percent of directors cited impediments to removing a director, with the top constraint being that board leadership is uncomfortable with addressing the issue.
- 94 percent of directors say they receive information on competitor initiatives and strategy, but nearly a quarter wish it were better.
- 75 percent of directors said their boards took actions to oversee fraud risk.
- The most desirable attributes for board candidates are: industry experience, followed by financial expertise and operational expertise.
- 60 percent of directors believe annual training should be required for directors.
- 59 percent of directors indicated that their time commitments for strategic planning increased over the past 12 months (which was the highest category) and over 40 percent of directors indicated that they spent more time doing work related to succession planning, risk management and IT risks.
- 60 percent of directors of the largest companies believe they have a thorough understanding of the company’s risk appetite, whereas only 36 percent of directors of the smallest companies feel that way.