Board directors and c-suite leaders are often not aligned when it comes to the oversight of challenges and threats facing their businesses, according to the inaugural Global Board Governance Survey developed by Protiviti, BoardProspects, and Broadridge Financial Solutions, Inc.
The study, which captures the views of more than 1,000 board members and c-suite executives from organizations around the world, found that while boards and C-suite leaders are normally aligned in goal and purpose, they do not always see eye to eye on how to get there. It is vital that directors and management teams strategically work to bridge these gaps as their companies continue to face an uncertain macroeconomic environment, an ongoing global war for talent, rising geopolitical risks, cyber attacks, the rise of generative AI and other existential business threats.
While the board and C-suite each have their own part to play in the effective management of an organization, they must be on the same page when it comes to navigating the most complex and daunting challenges their companies will face. In addition to these challenges, the survey also points a way forward for boards and the c-suite to work more effectively by implementing corporate governance best practices, fostering organizational resilience, collectively addressing growth obstacles, and holding each other accountable for continued strong performance.
Joe Tarantino, president and CEO of Protiviti
While board members and c-suite executives largely agree on the top headwinds facing organizations, there is a significant perceived confidence gap on the board’s ability to address them. Of the 15 organizational threats evaluated, in only three instances did more than half of respondents believe their board was ‘extremely’ or ‘very’ prepared to address them. These were:
- 58%: Impact of compliance/regulatory requirements, including data privacy
- 58%: Access to capital/liquidity
- 55%: Corporate culture (resistance to change or inability to adapt)
Overall, respondents believe their boards are ill-equipped to manage the remaining 12 risks, with the four lowest confidence scores being:
- 29%: Political uncertainty
- 29%: Rapid change from disruptive innovation
- 27%: Geopolitical tensions and potential conflicts
- 27%: New and emerging technologies (AI, automation, IoT, metaverse)
The results of the survey reveal several key strategies to improve board governance and performance. Actions that boards and their management teams can take include:
- Sharpening focus on crisis management, cyber security issues, and organizational resilience.
- Identifying methods of mutual accountability to improve director engagement, assess board performance, and manage underperforming directors.
- Working together to address obstacles to organizational growth.
