NEW YORK, Sept. 12, 2013 /PRNewswire/ --There is a dichotomy in the boardroom between directors who believe it's appropriate to communicate about governance issues directly with stakeholders and those who do not, according to new research from PwC US's 2013 Annual Corporate Directors Survey. Directors are changing their communications practices with institutional and retail investors, analysts, proxy advisors, employees and regulators. With the continued focus on compensation, boards also spend more time on this topic and increasingly respond to say on pay voting results.
In today's release, PwC provides an inside look at key issues and board insights surrounding the areas of stakeholder relations, board practices and executive compensation. Conducted in the summer of 2013, 934 public company directors responded to the survey. Of those, 70% serve on the boards of companies with more than $1 billion in annual revenue.
"The evolution of corporate governance has caused directors to reconsider their relationships with stakeholders," said Mary Ann Cloyd, Leader of PwC's Center for Board Governance. "However, while some boards believe direct engagement on corporate governance, executive compensation and director nominations is part of their role, others think director communications in these same three areas is inappropriate."
Key survey findings include:
Diverging views on stakeholder engagement. There is a dichotomy between directors who believe it's appropriate to communicate about governance issues directly with stakeholders, and those who do not. Just over 30% say it's "very appropriate" to communicate about corporate governance issues, and about a quarter say the same regarding executive compensation and director nominations. Communicating about these same three areas is deemed "not appropriate" at approximately the same or slightly higher levels.
Wanted! Stakeholder communication policies. There are many other stakeholders with whom directors are rapidly evolving their communications practices. But nearly half of respondents say their boards have no policy, or a policy that's not useful, addressing director communication protocols. Considering the increasing frequency of stakeholder interactions, it's not surprising that about one-quarter of those without such a policy believe they should have one.
Boards respond to say on pay.This year, 70% of directors say their boards took action in response to say on pay voting results – an increase from 64% in 2012. The most frequent change was enhancing proxy statement compensation disclosures (47% compared to 41% last year). However, only 3% of directors say their company actually reduced compensation during 2013.
In addition, 2013 survey data on board composition, structure and performance is available for download at here, and 2013 survey data specific to IT oversight is available for download here.
Further survey data on the following topics will be available from PwC US as follows:
September 18, 2013—Strategy, Risk Management and the Regulatory and Governance Environment; as well as launch of the complete 2013 survey results
About PwC's Center for Board Governance
PwC's Center for Board Governance is a leading resource for directors. By promoting leading governance practices, the Center advances excellence in the boardroom and is dedicated to better enabling boards and audit committees to perform their important roles. To provide timely updates to board members, the Center publishes the Annual Corporate Directors Survey, monthly BoardroomDirect, and offers forums for directors to discuss current issues.
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