PwC Releases 2023 Annual Corporate Directors Survey
PwC recently released its 15th “Annual Corporate Directors Survey” which surveys over 600 public company directors on a variety of issues including ESG oversight, crisis management, board diversity, board effectiveness, and cyber oversight, among other areas. Interestingly, the survey suggests the pace with which directors are evolving to meet these challenges remains slow. The finalized survey notes “[r]esistance to evolution continues to plague many boards, particularly when it requires self-reflection about their own composition.” While the report focuses on corporate director practices, there are many important takeaways for fund directors.
On board refreshment, the study notes that 39% of respondents say their boards have not made any changes as a result of their board assessments. Additionally, 57% of survey respondents said they want at least two directors on their board replaced. The survey suggests that boards review their self-assessment process, reset the objective of the assessment, and reaffirm that tough conversations may need to come out of the feedback process. Regarding ESG oversight, the survey found, “[f]emale directors are more likely to see ESG issues as linked to company strategy and having a financial impact on company performance.” The survey also found that 40% of respondents say their board does not understand carbon emissions very well or at all. The survey cautions that while directors may “grow weary” of the conversation around ESG, the regulatory disclosure readiness will only grow in importance. The survey also notes that for better board effectiveness, boards should consider fostering deeper relationships with the management team supporting directors by inviting them to present or to join the board for broader social events outside of formal board meetings.
Click here to read PwC’s 2023 Annual Corporate Directors Survey.