66% of female directors support actions that would reduce the impact of climate change despite a short-term financial impact, compared to only 45% of male directors, according to PwC’s 2022 Annual Corporate Directors Survey. Female directors are also more supportive of non-financial goals such as DE&I metrics as well as environmental goals, whereas male directors are more likely to support goals related to succession planning, quality and customer satisfaction.
Directors revealed other surprising responses and PwC demonstrates how these perceptions could lead to board blind spots (see page 5). For instance, environmental expertise ranked last on the list of important skills for directors with only 11% believing it is important, but with climate regulations pending, boards will need to oversee detailed disclosures in an area where they have skill gaps and are less confident to govern. Some additional blind spots are mentioned below:
- Board Refreshment. A staggering 48% of directors believe that at least one fellow board member should be replaced, with 19% suggesting that 2 or more directors on their board should transition off. Despite this, board directors are overwhelmingly against formal refreshment policies such as mandatory retirement ages or term limits.
- Peer Performance. Directors are increasingly critical of their peers’ performance with 19% reporting a fellow member being reluctant to challenge management (up from 12% in the previous year) and 17% indicating a member that has overstepped on oversight (up from 11%).
- Board Diversity. Since 2019, there has been an increase from 27% to 34% of directors who feel diversity efforts resulted in “unneeded candidates” and from 23% to 31% resulting in “unqualified candidates.” In spite of this, support for diversity of thought based on factors like gender, race, age and board tenure remains high and there was also a large jump in socio-economic backgrounds as a diversity factor – increasing in support from 39% to 58% from 2019.
- Areas of Oversight. Cyber-security and talent management top the list of topics that hit board agendas and are also areas where director have high confidence in their understanding of the issues. However, internal controls and processes around data collection are increasingly important and less than two-thirds report confidence in their understanding of this area.