NEW YORK, April 20, 2016 /PRNewswire/ -- "Boards cannot afford to have directors around the table who aren't delivering value," says a new report based on the 2016 Global Board of Directors Survey, released from Professor Boris Groysberg and Yo-Jud Cheng of Harvard Business School, Spencer Stuart, the WomenCorporateDirectors (WCD) Foundation, and researcher Deborah Bell. With greater institutional and activist shareholder activity and stronger concerns about risk and global competitive threats, boards are taking on "a more strategic, dynamic, and responsive role" in their companies, the report states – pushing "issues around board composition and diversity to the fore."
Capturing responses from more than 4,000 male and female directors from 60 countries around the world, the survey – from WCD, led by CEO Susan Stautberg; Spencer Stuart, spearheaded by Julie Hembrock Daum, head of the firm's North American Board Practice; and their research colleagues – is one of the largest board surveys ever.
The survey research revealed "a gap between best practice and reality" in boards' readiness to handle strategic challenges, especially regarding talent issues. While both public and private company directors named "attracting and retaining top talent" as one of the top challenges to their companies' achieving strategic objectives, respondents gave their own boards relatively low ratings when it came to talent issues such as board diversity, HR/talent management, CEO succession planning, and director evaluations.
Other key findings in the report include:
- Cybersecurity in top 3 of political issues relevant to directors. The political issues directors ranked as most relevant to them are the economy, the regulatory environment, and cybersecurity.
- Women directors report higher concerns about risk than male directors. Across the board, female directors reported a higher level of concern about various risks to a company than their male peers – from concerns about activist investors and cybersecurity to regulatory risk and the supply chain.
- Directors – especially women – favor tools to trigger board turnover. In an effort to ensure fresh thinking as more demands are placed on boards, the majority of respondents favored director retirement ages and term limits. Female directors were more positive on term limits (in favor: 68% of women vs. 56% of men) and mandatory retirement ages (in favor: 57% of women vs. 39% of men) than their male peers.
- Greater scrutiny/spotlight doesn't always drive greater diversity. Public companies have more independent directors than the private companies whose directors participated in the survey have, but private company directors report similar proportions of female and ethnic minority directors on their boards.
- Why isn't the number of women on boards increasing? As the percentage of women on boards stays stagnant, there is both a gender divide and a generational divide on why this is. Male directors, especially older respondents, said the "lack of qualified female candidates" was the primary reason; women cited most often the fact that diversity is not a priority in board recruiting, while younger male directors (age 55 and under) said that the reason was because traditional networks tend to be male-dominated.
- Boardroom diversity quotas not supported overall. Nearly 75% of surveyed directors do not support boardroom diversity quotas. Forty-nine percent of female directors support them, but only 9% of male directors do.
For more information about the 2016 Global Board of Directors Survey, please contact Suzanne Oaks Brownstein or Trang Mar of Temin and Company at firstname.lastname@example.org or 212.588.8788.
About WomenCorporateDirectors Education and Development Foundation, Inc.
The WomenCorporateDirectors Education and Development Foundation, Inc. (The WCD Foundation) is the only global membership organization and community of women corporate directors, with more than 3,500 members serving on more than 8,500 boards. A 501(c)(3) not-for-profit organization, the WCD Foundation has 72 chapters around the world, with seven more to launch over the next year. The aggregate market capitalization of public companies on whose boards WCD Foundation members serve is over $8 trillion. In addition, WCD Foundation members serve on numerous boards of large private and family-run companies globally.
WCD Foundation membership provides a unique platform for learning from the intellectual capital of accomplished women from around the world, and the WCD Foundation's mission is to increase courage, candor, inclusion, and cohesion in the boardroom.
The WCD Foundation has 72 global chapters, located in Arizona, Atlanta, Austin, Beijing, Boston, Charlotte, Chicago, Chile, Cleveland, Colombia, Columbus, Dallas/Fort Worth, Delhi, Denmark, Finland, France, Germany, Greater Colorado, Greater New Mexico, Guatemala, Gulf Cooperation Council, Hanoi, Hawaii, Ho Chi Minh City, Hong Kong, Houston, Iceland, Indonesia, Israel, Japan, Kansas City, Kenya, London, Los Angeles/Orange County, Malaysia, Melbourne, Mexico, Milan, Minnesota, Mongolia, Morocco, Mumbai, Netherlands, New York, New Zealand, Nigeria, Northern California, North Florida/South Georgia, Panama, Peru, Philadelphia, Philippines, Quebec, Rio de Janeiro, Rome, San Diego, Sao Paulo, Seattle, Shanghai, Singapore, South Africa, South Florida, Spain, Switzerland, Sydney, Tampa, Tennessee, Toronto, Turkey, Uruguay, Washington, D.C., and Western Canada. For more information visit www.womencorporatedirectors.com or follow us on Twitter @WomenCorpDirs, #WCDboards.
About Spencer Stuart
At Spencer Stuart, we know how much leadership matters. We are trusted by organizations around the world to help them make the senior-level leadership decisions that have a lasting impact on their enterprises. Through our executive search, board and leadership advisory services, we help build and enhance high-performing teams for select clients ranging from major multinationals to emerging companies to nonprofit institutions.
Privately held since 1956, we focus on delivering knowledge, insight and results through the collaborative efforts of a team of experts – now spanning 56 offices, 30 countries and more than 50 practice specialties. Boards and leaders consistently turn to Spencer Stuart to help address their evolving leadership needs in areas such as senior-level executive search, board recruitment, board effectiveness, succession planning, in-depth senior management assessment and many other facets of organizational effectiveness. For more information on Spencer Stuart (Twitter: @SpencerStuart), please visit www.spencerstuart.com.
Boris Groysberg is the Richard P. Chapman Professor of Business Administration at Harvard Business School. Professor Groysberg's work examines how a firm can be systematic in achieving a sustainable competitive advantage by leveraging its talent at all levels of the organization. He is the coauthor, with Michael Slind, of the book Talk Inc. (Harvard Business Review Press, 2012). Follow him on Twitter @bgroysberg.
Deborah Bell is an independent researcher of organizational behavior whose work focuses on leadership, drivers of success, and organizational effectiveness and dynamics, especially at the board level.
Yo-Jud Cheng is a doctoral candidate at Harvard Business School whose research focuses on CEO succession, top management teams, and corporate governance issues.
This survey was conducted through a partnership between Professor Boris Groysberg and Yo-Jud Cheng from Harvard Business School; WomenCorporateDirectors Foundation, led by Susan Stautberg; Spencer Stuart, led by Julie Hembrock Daum; and independent researcher Deborah Bell.
About 4,000 board members of companies headquartered in 60 countries (U.S. boards made up 48% of the sample) responded to the survey. Results are based on all responses submitted between October 12 and December 1, 2015. The data were analyzed along several dimensions including gender, company ownership, geography, and industry (not all respondents provided information on these dimensions). Boris Groysberg and Yo-Jud Cheng are continuing to work with Harvard Business School's Global Research Centers to increase the response rate in certain countries and regions.
SOURCE WomenCorporateDirectors Education and Development Foundation, Inc.; Spencer Stuart