As the age of COVID rolls on (and on), new research from the National Association of Corporate Directors (NACD), representing more than 21,000 board members, analyzes survey responses from directors worldwide, exploring how boards across the globe are navigating the economic and social impacts of the COVID-19 global health crisis and its unprecedented impact on business and society.
The newly released Global Network of Director Institutes 2020–2021 Survey Report, a collaborative effort between the Global Network of Director Institutes (GNDI) member organizations, representing more than 150,000 corporate board members worldwide, underscores the common themes and shared purpose that link this global community of directors spanning four key regions.
“As we emerge from a challenging and unprecedented year, it will be more important than it has ever been before to leverage lessons learned, embrace change, and adapt to new ways of working,” said Peter R. Gleason, GNDI board chair and CEO of NACD, in a news release. “The insights we have gathered offer an opportunity for directors from around the world to learn from each other and to reimagine through a global lens the future of board governance.”
Key highlights of the report’s findings:
High marks for directors and their management teams
Seventy-two percent of directors surveyed were pleased with their crisis response and ability to provide oversight during the crisis, with 32 percent crediting prior scenario planning as a key factor in their ability to navigate the pandemic crisis.
- US-based directors were more likely to agree that they oversaw crisis management effectively without overburdening management, with 87 percent saying so compared to 79 percent globally, noting, however, that this was among their top challenges.
Increased emphasis on risk in 2021 and beyond
Seventy percent of directors surveyed indicated they expect to see a greater role for outside experts in risk scenario planning and decision making, with a focus on anticipating future challenges.
- US directors were more likely to note the growing importance of addressing ongoing employee health and safety risks as part of a broader risk strategy (46 percent vs. 44 percent globally). They also reported in the recent American Board Practices and Oversight Reportthat the COVID-19 crisis will change the long-term trajectory of the broad recognition of systemic racism (66 percent vs. 52 percent globally).
Virtual board meetings are here to stay
Among those surveyed, directors rated losing nonverbal communication as the top challenge of adapting to a virtual operating environment, with only 49 percent finding virtual meetings as effective as in-person meetings. However, 89 percent of respondents anticipate that digital tools will be an important resource for boards going forward.
- Ensuring that virtual board meetings were as effective as in-person meetings proved to be particularly challenging in the United States relative to the global average (47% vs. 39% globally), with 65 percent of US directors in the American Board Practices and Oversight Report that their board will hold at least one in five of their meetings virtually following the crisis, as opposed to 71 percent who said so globally.
Increased director time commitment
Two-thirds of directors surveyed reported that over the past year their time commitment increased by 50 percent or more, with the highest-ranked issue related to time spent with management to recalibrate strategy in response to short- and longer-term changes in the COVID-19 operating environment.
- US directors who serve on multiple boards reported they are less likely to agree that being on multiple boards challenged their effectiveness as a director, with only 15 percent in the American Board Practices and Oversight Report agreeing compared to 24 percent globally.
“As we look to broaden our perspective on the lasting implications of this global pandemic crisis, directors in the United States and around the world can leverage these findings to chart a path forward,” said Gleason.
“It is positive that many boards were able to build on core strengths and demonstrate agility in responding to the pandemic in 2020. However, it may well be that the greater test of governance is navigating the multitude of competing forces that will threaten the success of their organizations as the world returns to growth,” said Richard Smith-Bingham, executive director of Marsh & McLennan Advantage for Marsh & McClennan Companies, which has been a key collaborator on the GNDI project.
The Global Network of Director Institutes 2020–2021 Survey Report was fielded from August to November 2020 and drew on responses from nearly 2,000 directors representing 17 director institutes worldwide.