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Focus on strategy is key for boards to deliver value

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Focus on strategy is key for boards to deliver value

New survey indicates that board members want to spend more time on strategy and strategic risk, technology and cybersecurity, CEO succession.

According to a new survey by professional services firm KPMG, three-quarters of directors and business leaders think their board should spend more time on strategy and strategic risk. Other issues they would like their board to devote more time to include technology and cybersecurity (37%); succession for CEO and top management (36%); and the talent pipeline (26%).

Many survey respondents believe that directors may need to increase their time commitment.

"As the business and risk environment becomes more complex, the board's ability to prioritize and devote enough time to substantive issues becomes more vital," said Dennis T. Whalen, leader of KPMG's Board Leadership Center. "Improving board effectiveness so that directors can devote more time to forward-looking or value-creating issues—while also remaining focused on compliance, operations, and so-called rear-view mirror items—may require a change in the nature of board and director engagement with management teams and among directors."

Many directors and executives surveyed said they generally do not want to devote less time to other issues, such as compliance, audit, or financial reporting. Nearly one-quarter of those surveyed during the roundtables said no change was needed to their board agenda—suggesting that they were comfortable that their board was bringing the proper focus and attention to the "right" issues.

At the same time, many survey respondents believe that directors may need to increase their time commitment. Among those surveyed, 20% said they spend significantly more than 248 hours per year (the average spent on board work — e.g., preparation, board and committee meeting time, informal contacts with management and directors, etc. — according to data reported by the National Association of Corporate Directors). Another 29% expected their time commitment to increase going forward, while 35% said that 248 hours per year was adequate, and only 9% think less time is required.

The majority of those surveyed say they are satisfied (34%) or somewhat satisfied (53%) that the board has an effective process to "connect the dots" and help ensure alignment of talent, compensation, and culture with strategy.

Roundtable discussions focused on how the board's agenda is evolving to stay focused on the "right" issues; the ways in which the level and nature of the board's engagement is changing; the effectiveness of boards in dealing with board composition and succession planning; and the influence of and director engagement with major institutional investors.

 

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