Focusing on organizational resilience and
accountability for performance are governance best practices that
can enable directors and management teams to work more
effectively
MENLO
PARK, Calif., March 19,
2024 /PRNewswire/ -- Board directors and C-suite
leaders are not fully aligned on a range of critical issues when it
comes to the oversight of challenges facing their businesses and
the board's performance, according to the inaugural Global Board
Governance Survey developed by Protiviti, BoardProspects, and
Broadridge Financial Solutions, Inc. (NYSE: BR).
The study, which captures the views of more than 1,000 board
members and C-suite executives from organizations worldwide across
a variety of industries, found that while boards and C-suite
leaders are 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,
cyberattacks, 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," said Joe Tarantino, president and CEO of Protiviti.
"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."
Where the Board and C-Suite Diverge
Boards and the C-suite have many areas of agreement. Strategic
planning and execution rates as the top board priority according to
both groups. In addition, most director and C-suite respondents
"agree" or "strongly agree" that board members provide valuable
input into corporate strategy and major policy decisions.
However, when it comes to how well the board is carrying out its
responsibilities, some differences emerge between the corner office
and the boardroom. Ninety-two percent of board respondents rate
themselves highly on placing the interests of the company ahead of
their own interests, but only 73% of C-suite respondents said the
same. Only 58% of board directors agree that board members falling
short of expectations are addressed in a constructive manner, a
figure which was even lower (36%) for C-suite executives.
"Board members and C-suite executives are working toward the
same goals, but in some cases, the data shows they are taking
different routes," said Mark Rogers,
Founder and CEO of BoardProspects. "It's critical that leadership
teams and their partners work together, otherwise it will be
difficult to coordinate and execute nimble and competitive
responses to changing trends, policies and other market
threats."
On board and C-suite working dynamics and participation, 89% of
board members give themselves high ratings on coming prepared to
each meeting, but only 70% of C-suite respondents said the same.
Ninety-five percent of board members rated themselves highly on
being constructively engaged during meetings and asking probing
questions, while only 80% of C-suite executives scored their boards
at this level.
When it comes to addressing specific business risks or other
business needs, there is misalignment between the board and C-suite
on which priorities are not receiving adequate time and
attention from the board, including:
1. Corporate culture
a. 28% of C-suite respondents
believe it is not receiving adequate attention
b. 19% of board respondents
believe it is not receiving adequate attention
2. Environmental, social and governance
(ESG)
a. 20% of C-suite
respondents
b. 12% of board
respondents
3. Hiring and talent management
a. 21% of C-suite
respondents
b. 12% of board
respondents
Addressing Business Threats
While board members and C-suite executives largely agree on the
top headwinds facing organizations, there is also 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 include:
1. 58%: Impact of
compliance/regulatory requirements, including data privacy
2. 58%: Access to
capital/liquidity
3. 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:
1. 29%: Political
uncertainty
2. 29%: Rapid change from
disruptive innovation
3. 27%: Geopolitical tensions
and potential conflicts
4. 27%: New and emerging
technologies (AI, automation, IoT, metaverse)
How Boards Can Take Action
"Enhancing the dialogue between the C-suite and board members is
critical as companies strive to keep pace with technology and the
evolving marketplace and this study highlights both the strengths
(strategic planning, execution rates and risk management) and areas
of greater opportunity (digital transformation, new technologies
and cybersecurity)," said Michael
Tae, Co-President of Broadridge's Investor Communication
Solutions. "Good corporate governance requires an engaged and
active approach, in order to improve both board and C-suite
performance and foster growth prospects."
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:
1. Sharpening focus on
crisis management, cybersecurity issues, and organizational
resilience.
2. Identifying methods of
mutual accountability to improve director engagement, assess board
performance, and manage underperforming directors.
3. Working together to
address obstacles to organizational growth.
Resources Available
"Views on Board Governance - Where Directors and C-Suite Leaders
Align and Diverge" from Protiviti, Broadridge and BoardProspects is
available for complimentary download here. The report is broken out
by company type, size, industry, geographic region and respondent
role. Protiviti's global webinar series kicks off on March 19, 2024, with a one-hour panel discussion
on the survey's findings. It will be hosted by Protiviti and
feature executives from Broadridge and BoardProspects. Attendance
is free with registration here. If you cannot attend live, the
recording can be accessed anytime here.
Methodology
Protiviti, Broadridge and BoardProspects conducted the Global
Board Governance Survey in the fourth quarter of 2023. The
companies polled more than 1,000 (n=1,006) board members and
C-suite executives. For a number of questions, the responses of
directors who serve on multiple boards reflect the largest company
for which the director serves on the board.
About Protiviti
Protiviti (www.protiviti.com) is a global consulting firm that
delivers deep expertise, objective insights, a tailored approach
and unparalleled collaboration to help leaders confidently face the
future. Protiviti and our independent and locally owned Member
Firms provide clients with consulting and managed solutions in
finance, technology, operations, data, analytics, digital, legal,
HR, governance, risk and internal audit through our network of more
than 85 offices in over 25 countries.
Named to the 2023 Fortune 100 Best
Companies to Work For® list, Protiviti has served
more than 80 percent of Fortune 100 and
nearly 80 percent of Fortune 500 companies.
The firm also works with smaller, growing companies, including
those looking to go public, as well as with government agencies.
Protiviti is a wholly owned subsidiary of Robert Half Inc.
(NYSE: RHI). Founded in 1948, Robert Half is a member of
the S&P 500 index.
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech
leader with over $6 billion in
revenues, provides the critical infrastructure that powers
investing, corporate governance, and communications to enable
better financial lives. We deliver technology-driven solutions that
drive business transformation for banks, broker-dealers, asset and
wealth managers and public companies. Broadridge's infrastructure
serves as a global communications hub enabling corporate governance
by linking thousands of public companies and mutual funds to tens
of millions of individual and institutional investors around the
world. Our technology and operations platforms underpin the daily
trading of more than $10 trillion of
equities, fixed income and other securities globally. A certified
Great Place to Work®, Broadridge is part of the S&P 500® Index,
employing over 14,000 associates in 21 countries.
For more information about us, please visit
www.broadridge.com.
About BoardProspects
BoardProspects is the premier board recruitment solution for
public and private companies. Founded in 2010, the innovative
technology platform offers for-profit corporations of all sizes a
cost-effective way to identify, assess, and recruit board members
from a prestigious community of highly-regarded and credentialed
board members, c-suite executives, and thought leaders. In 2023,
more than 395 corporate board seats were filled through the
BoardProspects platform.
Protiviti is not licensed or registered as a public
accounting firm and does not issue opinions on financial statements
or offer attestation services.
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SOURCE Protiviti