Director 360: Degrees of progress
As boards grapple to fulfill a wide range of roles amid increased scrutiny, growing compliance demands, and the recovery from a challenging economic environment, Deloitte Touche Tohmatsu Limited’s (DTTL) 2nd edition publication - Director 360: Degrees of progress takes a look at issues ranging from board composition, regulation, diversity, and risk oversight in a survey of 288 directors in 19 countries, drawing global comparisons to Middle Eastern practices.
“An interesting finding from the survey is that such a large number of the directors surveyed expect the level of scrutiny from shareholders to increase in the next few years. The survey results reflect ongoing and substantial change in the global business environment and the responsibilities of board directors. The uncertain economic climate continues to weigh heavily on boardroom agendas. Over the next few years, we expect to see shareholders continue to exert their influence to ensure boards are looking out for the best interests of the company.”
- Dan Konigsburg, DTTL Managing Director, Global Center for Corporate Governance
Highlights from the survey
Executive remuneration has become overly complex
Nearly half of global respondents (49 percent) felt that the drive in many countries to link pay with performance, in a way that considers long and short-term, financial and non-financial performance, carries with it the danger that remuneration plans and policies become difficult to understand. And, while remuneration of board members remains very different across jurisdictions, 52 percent of directors agreed that their pay was appropriate.
Boards' involvement in the organization’s strategic plans varies
More than 88 percent of all directors currently engage in active discussion on strategic plans and objectives. There was found to be varying degrees in the level of board involvement – some were architects of strategy alongside management, and others limited their involvement to endorsing management’s strategies.
Regulatory changes set to impact board’s area of focus
The introduction of significant governance regulation, such as the Dodd Frank Act in the U.S. and the European Commission Green Paper in the EU, over the last two years has contributed to over 85 percent of directors in almost all jurisdictions to forecast that boards will be impacted by regulation. There is a belief among some directors interviewed that if the regulatory environment continues to increase in complexity, there may be a reluctance to join boards in the future.
Participating countries/ regions
- Czech Republic
- Hong Kong
- the Middle East
- New Zealand
- South Africa
- The Philippines
- United States.