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Global Board Survey 2021

Boards In Flux

As 2021 is coming to an end it is becoming clear that the unprecedented state of flux which the world has been in since the outbreak of the Covid19-pandemic around beginning of 2020, is not going to end anytime soon. New variants of the virus keep surfacing, numbers of infected people are surging most places, vaccines are still unequally distributed globally and mind you also unequally welcomed amongst a number of people in those countries that actually do have access to a sufficient supply of vaccine doses, health care systems are under various levels of pressure and distress, supply chains are constantly being interrupted, and production entities as well as transportation channels are less predictable than ever before in the past two decades. However, there still seems to be ambiguity among politicians, business leaders and economists as to whether or not we are facing a global scenario of high inflation rates, falling stock prices, shortage of raw materials such as copper, silicon and lithium, etc. In some regions, economies are still very strong, while in others the financial systems and economic politics are being tested. In some countries, financial liquidity is better than ever before, while others go through a scenario resembling the great depression the 30’es. Thus, the global business weather forecast for 2022 surely speaks of both dense fog and strong winds. Add to this an increasingly unstable geopolitical situation with tension around and/or between countries like Russia, Ukraine, Belarus, the EU, USA, China, Afghanistan, Australia, Turkey, Iran, and many more, plus more and more extreme weather implications from climate change, a divisive media scene, greater political polarization, and spiking numbers of cyber crime incidents, you have yourself a melting pot of both threats and opportunities – which in China is known as Wei Ji – which translates into ‘crisis’ in English. The important thing to remember however is exactly that of the implied opportunities that a crisis also beholds. The ability to steer through the opacity of a disrupted yet still heavily interdependent global business world will in the coming year either qualify or disqualify corporate boards like never before. Even more so it is remarkable to see that a majority of global boards remain optimistic about the future for their companies, and vigilant in their efforts to keep professionalizing their own boards. Between September and November 2021, we asked around our sizeable global network of chairs and board members, and we are very proud to hereby present to you the findings of our Global Board Survey 2021 – Boards in Flux. We have been looking at what’s hot, what’s not and what’s next within Corporate Governance and Board Leadership – because we know that what drives the board will always most certainly cascade down to executive management and from there further down the organization. Some boards we can look to for inspiration, others will more seek to be inspired themselves. We have investigated how boards are composed, how they work together, what and how they prioritize, and what they believe the future beholds for themselves, their companies and the world overall. We dig into where they feel comfortable, and in which areas they could innovate or improve. We look into their position on various elements of the strategic picture, and on competencies they feel lacking. Or in other words; we investigate how boards adapt to a state of constant flux – and what that implies for the companies they steward.

Global Board Survey 2020

The Purposeful Board

Never has the world seen more rapid changes, the economy been more volatile, the climate situation been more uncertain, markets seen more disruption, the media scene been more ambiguous, and only rarely has the geopolitical situation been more complex. Implications on businesses are tremendous. Opacity has become the default in any and all industries when it comes to how strategies are being determined and milestones being set. Not surprisingly, this also carries direct consequences for leaders of businesses – not just among the C-suite but equally much for boards of directors. The days when business leaders only had to worry about making profits and steering clear of illegalities are long gone. Today, responsibilities and expectations on executives as well as non-executives are much more versatile and subject to significantly tougher scrutiny. No board anywhere on the globe will claim it to be easy to prioritize today’s agenda of strategic transformations, disruptive innovation, sustainable development, servicing shareholders and proxy advisors, formulating a meaningful why to furnish a strong employer brand, managing risks not only of operational but also of financial and digital nature, ensuring the highest possible standards of diversity and inclusion, deploying initiatives to ensure health and safety for all customers and employees, mitigating geopolitical uncertainty and unexpected regulatory changes, staying friendly with banks and investors, and not least doing right while doing good, ie. keeping ethical standards high in leadership and business practices while also ensuring that the company engages actively in supporting (at least some of) the 17 UN Sustainable Development Goals. It’s no wonder that boards across the globe increasingly show signs of mental respiratory distress as they try to keep afoot with the broader expectations of stakeholders at large. Yet, a number of boards do succeed under this new paradigm while others don’t. What is the secret sauce in the recipe of the successful ones? Is it in the composition? The board dynamics? The leadership vision and practices of the chair? In the number of hours spent? Perhaps a combination of them all – or maybe something entirely different. That is what we are investigating in this report. In January and February 2020, we asked around our sizeable global network of chairs and board members, and we are very proud to hereby present to you the findings of our Global Board Survey 2020 – The Purposeful Board. We have been looking at what’s hot, what’s not and what’s next within Corporate Governance and Board Leadership – because we know that what drives the board will always most certainly cascade down to executive management and from there further down the organization. Some boards we can look to for inspiration, others will more seek to be inspired themselves. We have investigated how boards are composed, how they work together, what and how they prioritize, and what they believe the future beholds for themselves, their companies and the world overall. One unveiling conclusion at this early stage: We see that one of the distinct characteristics of the truly effective and value-adding boards, is the shared vision of wanting to make a positive difference – obviously for the company but increasingly also in a broader societal context. In other words, boards that we can categorize as The Purposeful Boards.

Nordic Board Survey 2020

The Future-Proof Board

Valcon, the Scandinavian management consulting firm, and Board Network, The Danish Professional Directors Association, conducted a Scandinavian survey among corporate board chairs and board members to gain their view on the most significant trends, changes and challenges. We asked them to tell us how ready their companies and organisations were to act in a world with an unprecedented level of complexity and uncertainty. We also asked them to share with us their views on the board’s role in developing a future-proof company, a company ready to handle this complexity and uncertainty. We furthermore conducted interviews with several leading board members who shared their own perspectives on the challenges and opportunities in establishing a future-proof organisation, not least the challenges of defining the role of the board in such an organisation. HERE IS WHAT WE LEARNED 3 In short, the boards evaluated themselves as ready for the future. 265 Scandinavian board members rated the boards as well as the organisations highly in aspects of what it means to be future-proof. The board members answered favourably when it came to evaluations of the board’s focus on continuous improvement and development of the organisation as well as ongoing adjustments of the organisation. Overall, the picture painted by the respondents shows that the boards are ready for disruption of their markets and changing customer needs and that they know the importance of continuously developing the strategy and processes to reflect these changing market conditions. It would also appear that the boards have confidence in their organisations’ future-proof state. They rated their organisations almost as highly as themselves in terms of ability to adapt to the changing needs of customers and to have the necessary insights and relevant processes in place.

Global Board Survey 2019

Cerating Impact In And From The Boardroom

Predictability has been replaced by exponentiality and disruption. All businesses are now facing the challenge of trying to navigate through an opaque political, societal and economical fog – and just adding spice to that; in an acceleration continuum that resembles the experience of jet fighter pilots when reaching 6 G. When everything around you changes at increasing speed, remaining in your own place actually means you will soon feel like falling back. Inevitably, boards of today must act much more agile than any of their predecessors in order for their businesses not to hit a redundancy wall. This puts a tremendous pressure on political, public and not least business leaders. They are the ones with the ultimate responsibility for setting course, navigating through hazardous waters and reaching destinations. Some we can look to for inspiration, others will more seek to be inspired themselves. In January and February 2018, we asked around our sizeable global network of chairmen and board members, and we are very proud to hereby present to you the findings of our Global Board Survey 2018 – Boards of the Future. We are looking at what’s hot, what’s not and what’s next within Corporate Governance and Board Leadership – because we know that what drives the board will always most certainly cascade down to executive management and from there further down the organization. We dig into how boards are composed, how they work together, how they enhance their effectiveness, how much time they spend, and which tasks they prioritize. We ask them about their look on the future from a societal perspective, from the company’s point of view and in relations to the board’s own development. We investigate where they feel comfortable, and in which areas they could innovate or improve. We look into their position on various elements of the strategic picture, and on competencies they feel lacking. Or in other words; we investigate how boards prepare for the future.

Global Board Survey 2018

Board Of The Future - How Boards Take Charge Of The Future

Predictability has been replaced by exponentiality and disruption. All businesses are now facing the challenge of trying to navigate through an opaque political, societal and economical fog – and just adding spice to that; in an acceleration continuum that resembles the experience of jet fighter pilots when reaching 6 G. When everything around you changes at increasing speed, remaining in your own place actually means you will soon feel like falling back. Inevitably, boards of today must act much more agile than any of their predecessors in order for their businesses not to hit a redundancy wall. This puts a tremendous pressure on political, public and not least business leaders. They are the ones with the ultimate responsibility for setting course, navigating through hazardous waters and reaching destinations. Some we can look to for inspiration, others will more seek to be inspired themselves. In January and February 2018, we asked around our sizeable global network of chairmen and board members, and we are very proud to hereby present to you the findings of our Global Board Survey 2018 – Boards of the Future. We are looking at what’s hot, what’s not and what’s next within Corporate Governance and Board Leadership – because we know that what drives the board will always most certainly cascade down to executive management and from there further down the organization. We dig into how boards are composed, how they work together, how they enhance their effectiveness, how much time they spend, and which tasks they prioritize. We ask them about their look on the future from a societal perspective, from the company’s point of view and in relations to the board’s own development. We investigate where they feel comfortable, and in which areas they could innovate or improve. We look into their position on various elements of the strategic picture, and on competencies they feel lacking. Or in other words; we investigate how boards prepare for the future.

Global Board Survey 2017

Advancing Boards

The past year has seen major events – politically as well as business-wise – that only few would have predicted. Across the world, we are witnessing polit – ical dogma shifts, greater polarization, technological advancements, business model innovation break – throughs, geopolitical turbulence, armed conflicts, terrorism, migration streams, artificial intelligence unfolding, climate change rapidly developing, alter – native facts and fake news allegations, digitization of services and products, cybercriminals playing a real role in the agenda-setting, etc. A lot of these developments will be seen as advance – ments and posing positive implications for a majority. However, another lot of these changes have created and will continue to create an enormous amount of uncertainty and insecurity across most nations and populations. Predictability is deteriorating and ex – pert statements are becoming unreliable. All in all, we find ourselves in a world less stable in – fluenced by people less reliable. – yet challenged further by a continuous acceler – ating technological development, implying that not only do we have to assess, plan and act through less transparent conditions but nevertheless try to steer through at increasing speed. This puts a tremendous pressure on political, public and not least business leaders. They are the ones with the ultimate responsibility for setting course, navigating through hazardous waters and reaching Thus, we are left trying to navigate through an opaque political, societal and economical fog destinations. Some we can look to for inspiration, others will more seek to be inspired themselves. In January and February 2017, we asked around our sizeable global network of chairmen and board members, and we are very proud to hereby present to you the findings of our Global Board Survey 2017 – Advancing Boards. We dig into how boards are composed, how they work together, how they enhance their effective – ness, how much time they spend, and which tasks they prioritize. We ask them about their look on the future from a societal perspective, from the compa – ny’s point of view and in relations to the board’s own development. We investigate where they feel com – fortable, and in which areas they could innovate or improve. We look into their position on various ele – ments of the strategic picture, and on competencies they feel lacking. Or in other words; we investigate how boards advance – and how com – panies advance with them.

Global Board Survey 2016

Radical Innovation and Growth

Today, boards have taken on the challenging responsibility of overseeing their companies’ radical innovation efforts. From the Global Board Survey 2016 we learn that already today 22% of respondents own a so-called Division-X, a unit where the goal is to find radically new products or services to the company. With Google’s semi-secret research and development facility Google X as role model, many corporations see their own Division-X efforts as strengthening competitiveness and increasing chances of company growth. When perfectly orchestrated, this is an engine to build wholly new revenue streams through new markets, entering new industries or even through cannibalization of the companies’ core activities to adapt to the future. At board level, what we are seeing is the beginning of a shift among board professionals’ responsibility. As if oversight of company strategy, risk management, succession planning, budgeting and forecasting, sales and marketing, operations, auditing, IT, remuneration and tax was not already a fight. Now corporate governance includes overseeing new business development with its itchy elements of experimentation, demand for scalability, risk of failure and navigation in a fully digitalized and unpredictable new business world. On top of this new bizz today is developed at a pace that leaves little time for thorough analysis and precise risk mitigation. Welcome to the era of disruption, now governed by the most influential level of people in the business world! Whereas the survey data show that boards are embarking into their new extended roles, they lack understanding of innovation as well as talent management to build wholly new revenue streams. 40% of respondents have no board director with sufficient knowledge about digital disruption and 43% feel their management invests too little to achieve their long-term growth goals. In addition, 34% of respondents characterize their board’s risk appetite as one where they try to avoid big financial risk and another 18% try to avoid failure in all their dealings. In combination the boards stand unarmed to enter the battlefield of future business creation in a disrupted world. The era of disruption can be characterized by the acceleration of technology, rapid business model development and build-up of interconnected platforms and communities with the speed of social media. Yet there is a clear tendency from our surveyed population towards expecting radical change coming later (as in five years) rather than sooner (as in this quarter). With the rate of change in the world today, this is disturbing. The finding, however, is sustained by the distinct majority of respondents stating that they are acting in response to an opportunity rather than a threat. If they felt that radical change was nearby, their actions would have been likely in response to a vexing threat. With an increased competitive business climate where your next erosion may come from a two-man-in-agarage company growing a disruptive (to you) enterprise, we are also surprised to find that boards’ growth expectations for the coming 24 months are on average as low as 5-10 %. Peter Diamandis, co-founder and executive chairman of Singularity University says “ 40% of today’s Fortune 500 companies are predicted to disappear in the next 10 years. Competition is no longer the multinational overseas; instead, it’s the exponential entrepreneur creating companies like Uber, Airbnb, DropBox, Oculus, Whatsapp, SpaceX and Tesla” (2015, Diamandis and Kotler, Bold). With this in mind, and adding the insatiable growth expectations of shareholders and investors, we believe across all industries that corporations must raise the bar and target for higher growth rates, now. We conclude that while global boards are taking action now, there is room for improvement. Especially when it comes to their insight into the area of innovative initiatives, organizational design, dealing with risk and failure and sheer experience in working in the huge discomfort zone driven by accelerating technology. If work has become steadily more demanding for the global board member recently, at least there was a predictability associated with that work. Now, in light of massive technological disruption, the new workload for a board professional revolves around a risky, failure prone and unknown innovation territory as they can start seeing themselves as largely inexperienced new business development leaders.

Global Board Survey 2015

Boards In A Disruptive Age

There has never been a greater focus on corporate boards than what we see today; from how they are composed over the influence they carry to how they perform, attention is attracted from politicians, public authorities, media, investors and all the rest of the business environment. Global financial turmoil followed by corporate scandals and investor activism are all ingredients which have put further pressure on time spend on boards, on the individual contributions to the board and the overall performance by the board and what that means to the company in question. The number of operational activities and the detail of these to which the board is expected to be familiar with is growing rapidly. Directors’ responsibilities are expanding and the implied liabilities are being scrutinized in an increasingly litigious environment. Take all this – and add the exponentially growing haste in technology innovation, business model development and shortened supply-chains that our businesses are facing – and you have the new paradigm that corporate boards all have to acknowledge and deal with: Boards in a Disruptive Age. Context InterSearch – Worldwide Organization of Executive Search Firms and Board Network – The Danish Professional Directors Association have together performed this Global Board Survey 2015 during February – April 2015 among 582 global corporate chairmen and boardmembers from 43 countries on all populated continents.

Bestyrelses-evaluering 2013

When Good is the Enemy of Great

In recent years, there has been more focus on the work of boards in general, and in its wake attention, more and more measures have appeared from shareholders as well as the press and legislators who sets demands and expectations for the work of boards. Among these measures are both hard law and soft law, which respectively require and recommend that boards prepare and report on board evaluations. In Denmark, a law has been introduced for financial companies, which requires that financial companies carries out evaluation of the board’s competences. The Committee for Good Corporate Governance recommends that (listed) companies carry out board evaluations, and individual sectors have their own recommendations for good board work, where it is also recommended that boards carry out evaluations.

BOARD NETWORK og PwC har i sommeren 2013 gennemført en spørgeskemaundersøgelse om bestyrelsesevaluering. Denne publikation gengiver resultaterne og tegner et billede af fakta, holdninger og
tendenser for arbejdet med dem.
Bestyrelsesevaluering har vundet indpas i de danske bestyrelser som et værktøj, der kan danne grundlag
for løbende forbedringer af bestyrelsens arbejde. Vores undersøgelse viser, at bestyrelserne gennemfører
evaluering for at bruge den som analyseredskab relateret til hvilke forbedringer, der bør gennemføres, og
til at identificere og beslutte hvorledes sådanne forbedringerne kan gennemføres.
Evalueringerne bruges desuden som katalysator for den interne, udviklende dialog imellem bestyrelsesmedlemmerne. En dialog som respondenterne altoverskyggende vurderer som det mest værdifulde i
evalueringsprocessen. Evalueringer er i Danmark fokuseret på det samlede bestyrelseskollektiv – således
evalueres specifikke udvalg kun i sparsomt omfang.
For de bestyrelser, der ikke gennemfører bestyrelsesevalueringer, er hovedbegrundelsen virksomhedens
ejerstruktur, i henhold til hvilken bestyrelsesevaluering ikke anses for egnet. Andre forhold, der ofte
spiller en rolle, er bestyrelsens interne uenighed om værdien af en evaluering, eller at der endnu ikke har
været tid og lejlighed til at gennemføre evaluering.
I 2012 blev der i Danmark indført lovpligtig kompetenceevaluering i de finansielle virksomheder. Det
bemærkes for en god ordens skyld, at termen ”bestyrelsesevaluering” i nærværende publikation dækker
over den betydeligt bredere form for evaluering, som udover en kompetenceafdækning også behandler
forhold som bestyrelsens interne dynamikker, samarbejdet med direktionen, etc.
Med denne undersøgelse ønsker vi at sætte spot på fakta, holdninger og tendenser blandt de bestyrelser,
der allerede gennemfører evalueringer, i håb om at samle erfaringer om, hvordan bestyrelserne kan gøre
mere af det, der bringer værdi og mindre af det, der blot er compliance.
Hvordan evaluerer bestyrelser bedst?
Bestyrelsen bør som enhver anden del af virksomheden stræbe efter at skabe mest mulig værdi for den
virksomhed, den har ansvaret for. Effektive bestyrelser er ofte meget bevidste om, hvordan bestyrelsesåret planlægges, hvordan bestyrelsestiden anvendes, både på og imellem møder, samt hvorledes de mest
optimalt udgør en strategisk sparringspartner for direktionen.
Sådanne bestyrelser er tillige bevidste om, at de for at blive endnu bedre, øge værdiskabelsen samt
udgøre en kompetent sparringspartner for direktionen til gavn for virksomheden, skal evaluere på deres
indsatser, resultater og sammensætning, herunder deres individuelle kompetencer. Dette i øvrigt helt på
linje med, at de jævnligt evaluerer direktionens indsatser og resultatskabelse, og forventer, at direktionen
tilsvarende evaluerer mellemledere og medarbejderes indsatser og resultatskabelse.