Boards in a Darwinistic age - Global Board Survey 2024

Respondents represent every imaginable industry, all sizes of companies from small startups to heritage organizations with turnovers of more than USD 20 Billion per year, and all kinds of ownership structures.

With a survey population as great and dispersed as ours, there will obviously often be regional or country-specific tendencies, or historically or culturally defined demographic trends, however we also see some very strong, universally valid results and trends which we want to highlight here:

• For the ninth year in a row, our global board survey shows that boards have once again worked harder in the past year than ever before, but even more importantly directors also expect to spend increased time on almost every single item on the board agenda in the year to come.
• Perhaps not too surprising that also means that boards in general feel that their remuneration is unsatisfactory. Although the average board remuneration has also risen over the past years, it hasn’t been at the same pace as the time spent increase.
• Boards are becoming more and more digital in their working style and internal communication processes which is exemplified in two ways; by a continuous growth in the use of digital board portals (to distribute materials and ensure encrypted communication channels), and by an increase in the use of virtual meetings, obviously not at the level seen during the Covid19 pandemic, but at a much higher level than in the pre-pandemic years. Adding to that, the fierce wave of generative AI washing over all parts of global society will undoubtedly result in an even more digital working mode for all boards.
• A clear majority of boards are back in an optimistic mode regarding the future for their companies, particularly when compared to past performance.
• Three very significant megatrends stand out in the eyes of global board members; AI, War / Geopolitical Instability, and Sustainability / ESG. Far behind the Top 3 fall trends like Inflation and Financial Turmoil, Climate Change, Increased Regulation, Demographic Shifts, and Covid19 (or similar) related health issues.
• Similarly, when predicting the most important board trends in the coming year, two trends outshine the rest; Increased Sustainability / ESG Focus and AI. The runner-ups include Digitalization (other than AI), Liquidity / Cashflow, and Cyber Risks / Data Privacy.
• When probed about the more immediate external challenges, Competition, Financial Turmoil / Inflation, and Political / Geopolitical Issues, rank as the top 3 external issues that boards expect to be dealing with during the next 12 months.
• Among internal challenges that boards will be prioritizing in the next 12 months, respondents mention Strategy first, followed by Sales, and HR issues.
• Boards continue their diversity efforts and the number of diverse candidates on boards is growing. Especially within the areas of gender, functional competencies, nationality, and age, the push for increased diversity continues to grow. This is very much in sync – and probably caused by – the pressure from investors, proxy advisors and regulation in several countries and jurisdictions. Bust most remarkable is probably that 52% of all respondents now support gender quota-initiatives, but the support continues to rely heavily on the respondent’s own gender: A staggering 74% of women support such initiatives while this is only true for 42% of the men (the latter however up from 35% last year).
• 28% of respondents believe the board composition should change from a competence point of view, but more significantly 21% would like to replace one of their fellow directors, 27% say that two of the current directors should leave while a worrying 28% state that 3 or more directors ought to be dismissed.
• Apparently, the level of satisfaction is higher amongst boards with Executive Management than with their fellow board members. Only 47% believe that one or more members from the EMT should be replaced. Much more worrying however is the fact that as few as 30% of global boards say that they have adequate succession plans in place for the CEO and the rest of the EMT.
• Boards in general find that they lack competencies within AI, cyber risk, public affairs, sustainability, marketing / PR, geopolitical insight, law, and supply chain/logistics the most. On the other hand, the vast majority feel well positioned within functional expertise areas like general management, industry knowledge, strategy, finance/economics, and governance/compliance.
• The importance of having both an independent chair as well as an independent majority of board members continues to resonate the most with companies of size; our survey finds that the higher the turnover, the more likely a company is to put weight on the importance of independent board members.
• In general, respondents rate the quality of the board’s overall performance quite high, but on a number of boards factors like better understanding of the company’s strategy, better alignment between EMT and the board, and a more effective mix of competencies amongst board members, are named the top factors to likely improve the board’s overall performance.
• The strategic areas which the boards feel the least comfortable around are AI/digitalization, Cyber risks/data privacy, and Talent management / HR. Within all three areas, the lack of confidence is at such a level that it calls for immediate attention since we also know from this year’s survey that these are all areas that pose some of the largest external and/or internal challenges for companies in general. None should try to fight their biggest battles with dull knives.
• The working climate on the board receives very high ratings from almost all respondents
• Board recruitment is getting more and more professionalized with 46% of boards using Executive Search firms to help identify board candidates (up from 44% last year). The big majority of boards however also take advantage of the board members’ as well as the owners’ own personal networks
• A large increase in the use of regular board evaluation is another factor pointing to the increased professionalization of boards. As many as 67% state that they perform regular, structured board evaluations.
• 52% have attended an Executive Education Board Program of more than 4 days’ duration, underlining the growing professionalization of boards. Just three years ago, that number was only 44%.

Read and download the full article by clicking on the below link together with the 10 characteristics that the most advanced boards have in common:

Download the full Report of the Global Board Survey 2024 – Boards in a Darwinistic Age

Special recognition to the author of the survey and the publication, Jakob Stengel, Managing Partner of Case Rose | InterSearch, Global Head of Board Practice and Founder & Chairman of Board Network – The Danish Professional Directors Association.