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Nothing is worse on a long-distance road trip than the driver and navigator bickering over the best route to take. Company leaders should remember this simple fact when aligning their objectives and methods.
While executives and boards are aligned on organizational objectives, they don’t necessarily agree on how to reach them, according to a new survey from Protiviti, BoardProspects, and Broadridge Financial Solutions.
“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,” Joe Tarantino, president and CEO of Protiviti, said in a news release.
The survey of more than 1,000 board members and C-suite executives found the two groups agree that strategic planning and execution is the top board priority, and that board members provide “valuable input into corporate strategy and major policy decisions,” according to the release.
Diverging paths. Board members patted themselves on the back throughout survey questioning. Their counterparts in the C-suite were a little less congratulatory. For instance, 92% of directors said they did a good job of placing the interests of the company ahead of their own, but fewer than three-quarters of C-suite respondents said board members did well on that front. Four of every 10 C-suite leaders believed their boards were prepared to address corporate culture-related challenges, versus 60% of directors.
Deltas also existed between which priorities that board members and C-suite execs felt were not receiving enough attention. Twenty-eight percent of C-suite respondents versus 19% of board members believed corporate culture needed more attention. Two out of 10 respondents in the C-suite believed ESG was not receiving enough focus, while only 12% of board respondents agreed.
Course correction. The report included recommendations for beefing up board governance and performance. Here are a few suggestions from the research team:
- Board directors should make an effort to understand concerns that senior leaders have on the organization’s preparedness for major risks. Directors should ensure they have enough information from management to understand these risks, and “should ensure they are receiving periodic risk updates from management so that there is clarity among both groups regarding potential risks to the organization,” according to the report.
- Organizations should improve the way they evaluate or fire underperforming directors. Only 58% of board directors and 36% of executives said board members who fall “short of expectations are addressed in a constructive manner.”
- Companies should emphasize director preparedness by establishing criteria for their performance through the board’s charter or corporate governance guidelines. The CEO should inform the board chair if there are issues with board preparedness and engagement.
“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,” Mark Rogers, founder and CEO of BoardProspects, said in the release.