Findings from PwC Survey on Corporate Board Effectiveness
In a joint survey conducted with the Conference Board, PwC surveyed about 550 public company C-Suite executives to gather their opinions on their boards of directors. The survey rated corporate boards on their interactions with management, expertise and performance, and a range of other topics that could be helpful to fund boards as they seek to improve their boardroom dynamics in the coming year. Overall, 60 percent of the executives surveyed gave their boards a rating of good or excellent on overall effectiveness. The survey found that 94 percent of executives said their boards understood the company’s strategy somewhat or very well and that 89 percent thought directors understood the company’s key business risks somewhat or very well. Executives also gave high marks to their boards’ expertise in the areas of finance and operations. However, C-Suite executives said boards could improve in several areas, including understanding the company’s crisis preparedness plan, directors’ preparedness for board meetings, and asking probing questions of management. Following are additional findings from the survey:
- Eighty-two percent of executives thought at least one director on their board should be replaced, and 43 percent thought two or more directors should be replaced compared to 21 percent of directors.
- Eighty-eight percent of executives thought board diversity brought unique perspectives to the boardroom, and 86 percent thought diversity enhanced board performance; 77 percent of executives thought board diversity enhanced company performance.
- Forty-four percent of corporate executives surveyed said diminished capacity due to director age is an issue on their board while 38 percent of these executives say directors serve on too many boards. According to the report, executives in the financial services industry are more likely to point to director age and over-boarding as significant issues.
- Crisis management and preparedness appeared to be an important area for management, with 48 percent of executives noting that directors needed to question and challenge management in this area.