C-suite Wants Directors to Speak Up More, Not Less

Do corporate boards effectively challenge senior management? Not according to a survey of more than 600 C-suite executives by PwC and The Conference Board: only 33 percent say their boards ask probing questions. Executives at the smallest companies (with annual revenues of less than $500 million) and largest companies (revenues of $10 billion or more) are most critical about their board’s ability to ask the right questions, as illustrated by the chart below.

Insights for What’s Ahead

Boards at smaller companies generally have lower levels of independence and less developed governance practices, which may explain why executives at these companies are also less likely to say their board challenges them sufficiently. At the largest companies, on the other hand, executives might question their boards’ ability to ask the right questions due to the large span of businesses that those boards need to oversee and understand.

Management bears much of the responsibility for ensuring that the board is engaged and asks the right questions. It should provide the board with meeting materials that highlight areas of risk and opportunity far enough in advance to allow directors time to formulate questions. Additionally, management should avoid overloading agendas with presentations that offer little opportunity for robust dialogue. At multidivisional companies, management should organize deep dives into the various business units as well as arrange director site visits. This allows boards to gain a deeper understanding of the various businesses and, subsequently, ask questions that effectively challenge management.

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