What people think about directors and their performance
There’s an interesting article in the April/May issue of NACD Directorship. It is based on work by Deloitte and Korn/Ferry International. The piece has the title “Main Street’s View of Directors Improves”, but there are some other interesting points, including these:
- “Directors are getting more involved and demanding greater transparency from management, especially as it relates to risk management. They are encouraging management to find a workable balance between risks that create value versus those that protect value. They are also examining strategy and creating a shortlist of business risks, then evaluating how to measure those strategic risks on an ongoing basis. Directors want to make sure they are not only checking the box to meet requirements, but that they are on the road to a more sustainable consideration.”
- While the survey indicates that “the overall opinion of both directors and CEOs has improved slightly”, it also concludes that When asked to rate the credibility of directors, the majority of 580 respondents described performance over the past 12 months as “adequate” or “poor.”
- The group that finds the board least effective in protecting shareholder interests is the “C-Suite”! 34% of top executives and senior managers rated director performance as ‘poor’. Even the directors who answered the survey were less than happy, with 20% putting boards represented in the ‘poor’ category.
- CEOs also fared less than brilliantly, with many more directors rating their performance ‘poor’ than ‘outstanding’. Few members of the executive management team rated their CEO performance as either ‘good’ or ‘outstanding’.
- An interesting section compares the level of influence the CEO has in practice to how much she should have. The results: everybody believes the CEO has too much influence.
- Every group believed the posts of CEO and chairman of the board should be separated. The group that supported the separation least was – the board.
What, if anything, caught your eye? Did anything surprise you?