Increased oversight of governance and compliance is a major component of what corporate board members say will help them drive growth in the coming year according to the recently released 2024 BDO Board Survey. While the survey also emphasizes that the strategic implementation of emerging technologies is key to unlocking opportunities and minimizing risks to achieving the sustained growth directors seek, what the directors revealed about the actions they’re taking to ensure their success is perhaps the greater finding from the survey.
For example, directors on highly functioning boards “report spending an annual average of 285 hours on their most challenging board, with roughly 30 percent of that time in board meetings, 30 percent reviewing materials and researching issues and 40 percent engaging with others outside of the boardroom.”
The description of the amount of time peers say they are devoting to various responsibilities can serve as an informal measuring stick for directors trying to decide if they are personally doing enough in certain areas to stay competitive with other boards in their industry. While there is no one-size-fits-all criteria to determine what makes one director more effective than another, this data provides valuable insight into what many directors are devoting their time and efforts toward.
Additionally, the survey highlights governance and compliance as areas directors are stepping up their oversight.
“When asked to describe all of the activities their board engaged in as part of its oversight of the prevention and detection of fraud,” the press release states, “the top three most cited include regularly reviewing and discussing compliance materials in board meetings (43 percent) monitoring and investigating whistleblowing reporting mechanisms (41 percent), and discussing company-specific factors that might increase the likelihood that fraud might occur (40 percent).”
The survey also found that 41 percent of the 250 director respondents say they will increase investment in cybersecurity, data privacy and governance next year.
Such attention to governance and compliance issues shows that a significant number of directors feel governance and compliance is critical to their strategies for growth in the future. Considering this data, corporate boards might want to reevaluate how their current compliance and governance processes may potentially contribute to or detract from the growth of their company in what some expect to be a very difficult economic climate next year.
Some key questions the BDO survey findings might spur directors to ask:
- Am I allocating the most effective amount of time to board meetings, reviewing materials, researching issues and engaging with others outside of the boardroom so that I can improve my ability to contribute to the future growth of my company?
- Could my board benefit from a reevaluation of the company’s governance and compliance policies and procedures to make sure they are supporting the strategies for sustainable growth that management is implementing?
- What opportunities can be gleaned, and risks avoided, from studying the actions of corporate director peers?
