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Well, this is gonna be awkward at the next board of directors function.
Company executives and board members have diverging views on what they view as the most critical areas of expertise for boards, and a hefty amount (92%) of execs think at least one of their board members should be replaced, according to a new survey from PwC.
Less than a third (30%) of executives rated their boards’ overall performance as either “excellent” or “good,” the survey also found. PwC noted in a report that the survey findings could suggest an underlying issue: “a perceived gap in the board’s ability to pivot and adapt amid the whirlwind of rapidly evolving strategic challenges and business risks.”
Executives identified industry, regulatory/public policy, and environmental/sustainability as their most important areas of expertise that their boards possess. Directors thought differently: They said expertise in finance, risk management, and operations were most important. Execs also had a clear wish list of the skills they want to see added to their boards in the next three to five years, with the top three areas of expertise being environmental/sustainability, artificial intelligence (including generative AI), and IT/digital.
The CFO take. Not everyone in the C-suite graded their boards so harshly. A majority of CEOs (86%) and CFOs (64%) gave their boards satisfactory marks. But most of those holding a COO, CHRO, or CIO title did not rate their boards positively.
What to do? The good news is people are not monolithic—they can adapt to new challenges and acquire the knowledge necessary to remain (or become more) competent at their roles.
PwC recommended executives be the guiding light in adding more relevant expertise to their boards. They should provide resources for directors to beef up their skills in the areas executives feel are lacking.
The firm also suggested directors “cultivate deeper, more meaningful relationships with the entire C-suite, not just CEOs and CFOs.” They should also “stay abreast of current trends and overall business evolution” by attending conferences or workshops, and speak with industry experts in areas they’re unfamiliar with.