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June 15, 2023 | Report
Forty-eight percent of C-suite executives believe their boards don’t understand shareholder priorities well; 56 percent say they don’t understand the concerns of other stakeholders, according to a survey of more than 600 C-suite executives by PwC and The Conference Board. The perception varies by function: while only 5 percent of CEOs think their boards don’t understand shareholder priorities, 35 percent of Chief Financial Officers, 56 percent of Chief Legal Officers, and 63 percent of Chief Marketing Officers believe this to be the case.
Insights for What’s Ahead: As organizations face the challenges of navigating the shift to a multistakeholder form of capitalism, understanding the priorities of stakeholders is key to the board’s effectiveness. But as The Conference Board has reported, boards are generally better at incorporating the “what” of ESG topics into decisions than incorporating the “who” of multiple stakeholders.
As a first step, management should inventory the information it already provides the board on the company’s relationship with, and expectations of, stakeholders and how the company serves them. It should then determine what information the board should receive to inform decision-making and engage with stakeholders. It will be important to engage the full C-suite in this process—and share the same information with both the board and executives—because it seems clear many executives may be underestimating the board’s knowledge in key areas.
The Conference Board has launched its Corporate Director Council program, offering an entirely new level of experience for directors in leadership positions on US public company boards. By joining a Corporate Director Council, Members will gain practical insights that can enhance their board’s effectiveness as a strategic partner with management. To learn more about this program, please contact Zachery Katich
Additionally, Members of our ESG Center are entitled to a complimentary expert briefing tailored specifically for your board, C-suite, or any group of employees on a broad range of ESG topics, including board effectiveness. If you are interested in taking advantage of this exclusive benefit, please get in touch with Jonathan Yankelewitz
