Board and C-Suite Leaders Diverge on How to Address Critical Business Challenges, Study from Protiviti, Broadridge and BoardProspects Finds
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.
View original content to download multimedia:https://www.prnewswire.com/news-releases/board-and-c-suite-leaders-diverge-on-how-to-address-critical-business-challenges-study-from-protiviti-broadridge-and-boardprospects-finds-302092948.html
SOURCE Protiviti
