Board and C-Suite Leaders Diverge on How to Address Critical Business Challenges — Protiviti, Broadridge and BoardProspects Reports
Board directors and C-suite leaders are not fully aligned on a range of critical issues regarding the oversight of their businesses' challenges and the board’s performance.
The study found that while boards and C-suite leaders are aligned in goal and purpose, they do not always agree on how to achieve it.
Directors and management teams must 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.
Joe Tarantino, president and CEO of Protiviti
Board directors and C-suite leaders are not fully aligned on a range of critical issues regarding 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.
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:
Corporate culture
28% of C-suite respondents believe it is not receiving adequate attention
19% of board respondents believe it is not receiving adequate attention
Environmental, social and governance (ESG)
20% of C-suite respondents
12% of board respondents
Hiring and talent management
21% of C-suite respondents
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:
58%: Impact of compliance/regulatory requirements, including data privacy
58%: Access to capital/liquidity
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:
29%: Political uncertainty
29%: Rapid change from disruptive innovation
27%: Geopolitical tensions and potential conflicts
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:
Sharpening focus on crisis management, cybersecurity issues, and organizational resilience.
Identifying methods of mutual accountability to improve director engagement, assess board performance, and manage underperforming directors.
Working together to address obstacles to organizational growth.
For more information, please visit www.protiviti.com.