A Corporate Board Member/Diligent Institute Research Report
WHAT DIRECTORS THINK
Navigating a Pivotal Year
ABOUT
Every fall, as part of our long-running What Directors Think franchise, Corporate Board Member surveys hundreds of public company board members on the topics that are top of the agenda in the boardroom for the year to come. For this 18th edition of the research, we partnered with Diligent Institute and asked 400 directors about the challenges and opportunities they see on the horizon as we kick off 2021.
KEY FINDINGS
Covid-19 and its impact on the economy tops corporate directors’ list of concerns as we head into 2021, followed closely by the political landscape.
Top Concerns Keeping Directors Up At Night
Economy & GDP
66%
Covid-19 Pandemic
64%
Political Landscape
50%
Three-quarters of directors are now focused on growth and recovering from the Covid-19 crisis, with an increasing interest in MA&D opportunities.
Top 3 Most Relevant Agenda Setters
Growth Strategy/Covid Recovery
74%
M&A Opportunities (and Divestitures)
48%
Capital Allocation
46%
Technological disruption is a high priority for directors in 2021, and 42% list it as most challenging to oversee.
Top 3 Issues Most Challenging To Oversee
New Technologies/Innovation
42%
Culture
40%
Cybersecurity
37%
When seeking out new members, diversity of skillsets and backgrounds and racial diversity are now the two most important attributes on their list.
Most Important Attributes For Selecting Next Board Member
Skillset/Background Diversity
68%
Racial Diversity
48%
Industry Expertise
46%
Gender Diversity
38%
Although directors say it’s now become an integral part of the overarching strategy, ESG discussions with shareholders were scarce in 2020.
Importance For The Board To Oversee Being A Good Corporate Citizen
0
%
Extremely Important
0
%
Very Important
DIRECTOR PERSPECTIVES
Previous
Next
BOARD ACTION ITEMS
TECHNOLOGY
- Embrace the opportunity for transformational change as a result of the pandemic by exploring new avenues to long-term value creation.
- Bring in necessary experience (either through board refreshment or outside expertise) to ensure the board has a foundational understanding of technological disruption, cyber risk and cybersecurity.
CURRENT
ENVIRONMENT
- Remain vigilant regarding vaccine timelines and possible roadblocks, as the manner and timeliness with which a vaccination is distributed will likely impact the trajectory and pace of economic recovery.
- Clarify the board’s role in political risk oversight and bring in necessary expertise to stay informed and act quickly regarding political risk in hyper-partisan and uncertain landscapes and business environments.
- Conduct scenario-planning exercises surrounding changing regulatory and tax environments if applicable to ensure preparedness for the new administration’s policies.
DIVERSITY
- Fully embrace the advantages of diversity as an advantage for long-term value creation through building out a robust plan for increasing DE&I at your company within a realistic timeframe.
- Employ techniques for increasing diversity through the board refreshment process and re-evaluate hiring processes to understand where you may be artificially limiting diverse perspectives.
- Ensure that diversity continues to be a topic of discussion in the boardroom and beyond by staying up to date with relevant research and other developments surrounding diversity (legislation, etc.) that could affect your company.
ESG
- Understand where your company fits into ESG frameworks and goals in terms of your industry, products, and goals. Different organizations can make different contributions to the ESG space, and there is no one-size-fits-all.
- Once you have ascertained ESG goals that make sense for your company, explore different platforms and methods of accurately measuring and reporting out on these goals.
- The ESG space is constantly expanding and shifting. Stay up to date on relevant research and happenings, so that you can be better prepared for boardroom conversations and changes to the way your company achieves its goals.