Can Boards Live Up to Expectations?
According to the 2016 Global Board of Directors Survey by Spencer Stuart and the WomenCorporateDirectors Foundation, 60% of directors think there is a gap between the expectations placed on boards and the reality of their ability to oversee a company, with 64% of this group saying expectations moderately exceed reality and a notable 25% thinking expectations far exceed reality.
Boards face greater need to live up to these expectations as well. With regulatory requirements increasing scrutiny of board members, many boards are implementing evaluation processes, with more than two-thirds currently conducting performance evaluations of directors. What’s more, these have concrete repercussions—a third of respondents report serving on a board where evaluations were used to remove a director.
“Directors themselves may be more qualified than ever, but they are facing higher expectations than ever,” said Julie Hembrock Daum, head of Spencer Stuart’s North American board practice. “These expectations are coming from multiple stakeholders—investors, consumers, regulatory bodies, the media—in a climate of unprecedented demands for transparency and accountability. We see directors seeking to stay ahead of these demands and devoting more time to board prep and information-gathering.”