Every other board member believes someone on their board should be replaced – according to the recently released PwC 2019 Annual Corporate Directors Survey (Find it Here). Further, 23% believe two or more directors should be replaced! That is quite startling and speaks to the quality of directors on boards. The top reasons noted in the survey are that directors:
- Overstep the boundaries of their oversight role
- Are reluctant to challenge management
- Have a style of interacting that negatively affects board dynamics
- Advanced age has led to diminished performance.
Many boards now conduct board assessments (ABS have experience assisting boards in this process), and an increasing number are beginning to also conduct individual director assessments. But still many do not. What are the roadblocks? There are three main ones arising form the survey. The first is that directors and management simply view it as a compliance exercise, the second is that they use an approach that doesn’t really allow for honest feedback, and the final one is a failure to follow-up on the results.
To overcome these roadblocks, PwC recommend five key actions to ensure the board assessment process is a useful and effective process. Each of the following five actions are explained in detail in the report, but in summary they are:
- Lead like a lion
- Change the endgame
- Address the elephant in the room
- Take action to get real results
- Be transparent with stakeholders
Boards that are willing to engage in this process will find themselves on a pathway to continuous improvement that can result on changes that allow the board to deliver greater value to the company and stakeholders.