Growth from all directions
Irish directors focussed on growth as economy improves. A third of Irish directors indicate growth is a top issue. Two thirds of Irish boardroom directors have not introduced diversity policies.
A third of Irish directors (31%) have indicated that driving growth in their companies is a top issue for them over the coming two years, up from 20% in 2013, which represents a significant shift in priorities in just twelve months, according to the latest Deloitte Global Director 360°: Growth from all Directions survey. The survey also found that half of directors (54%) indicated that strategy is a top issue and a third (31%) highlighted performance as a key area of focus.
Colm McDonnell, Partner, Deloitte commented: 'As the economy begins to improve in Ireland, we are seeing this reflected in directors’ priorities. Last year, Irish directors indicated they were very focussed on the financial crisis and regulation, governance and compliance. There has now been a significant shift in their priorities. Directors are now focussing on the creation of long term sustainable growth through M&A activity and capitalising on organic market opportunities.'
The Global Director 360°: Growth from all Directions survey provides the perspective of over 300 boardroom directors at public and private companies across 15 countries and regions. The survey highlights changes in key governance, regulatory, and compliance concerns, that companies around the world are facing in today’s challenging business environment.
The survey findings show that in Ireland, directors are satisfied that they have the appropriate levels of governance and oversight in areas such as CEO succession planning, executive compensation, evaluation of board performance and shareholder engagement.
Areas which may warrant further consideration by board members are that of diversity and technology risks. Two-thirds of Irish boardroom directors have not introduced diversity policies for board composition in their organisations. Of those that have introduced policies, 83% are in relation to gender, three quarters are in relation to qualifications, half are in relation to internationalisation and one quarter is in relation to age.
The findings also show that 17% of Irish directors surveyed do not discuss technology risks. Of those that do discuss such risks, the ones predominantly discussed are cyber security (74%), data privacy (74%) and data warehousing (49%).
'The goal for boards in a business environment that is continually changing must be to ensure that its oversight of these issues is constantly improving, and existing procedures are constantly being challenged to ensure they remain fit for purpose. Furthermore, as the governance landscape evolves it is important for boards to remain vigilant and informed as new areas such as analytics, mobile and cyber security make their way onto the boardroom agenda,' said McDonnell.
Mary Rose Burke, Director of Business Representation at IBEC, commented: 'Board agendas and the priorities of directors are changing, both in Ireland and internationally. More importance is being attached to board performance, sustainability and corporate governance. The challenge is to remain flexible to ensure business performance is maximised and risks are avoided.'
Highlights from the survey include:
- Interaction between shareholders and boards expected to increase - Nearly 70 percent of respondents globally expect the level of interaction between shareholders and boards to increase over the next few years. A similar number in Ireland, 63%, expect the same. 86% of Irish directors have a shareholder engagement policy in place. This is in contrast to 61 percent of directors globally who do not have such a policy in place.
- Social media not utilised by majority of board directors - Nearly two-thirds of all directors surveyed stated that their board does not use social media. This is surprising: as the world moves to an increasingly digitised environment, do boards know how to leverage social media to identify potential business and reputational risks facing their organisations? This trend is more pronounced in Ireland – over three quarters of respondents here do not use social media.
- CEO Succession: Less than half of the directors surveyed globally agreed or strongly agreed that the board effectively addresses CEO succession planning. Ireland was among the countries that had the highest levels of agreement (71%), in addition to the US (86%) and Finland (60%).
- Senior Independent Director: 77% of Irish directors stated that their board have a senior/lead independent director (versus 53% globally); however there is still evidence of uncertainty around the role and whether this is being used effectively. This is something Irish boards are starting to consider again.
- Orientation for new board members: Seven out of ten Irish directors indicated that they agreed or strongly agreed that the orientation process for new board members is formalised and effective. This is above the global average of 40%.
Notes to editors:
Director 360° methodology
As part of the Director 360° initiative, Deloitte member firms interviewed 317 board chairmen and directors in 15 countries around the world on the topic of board effectiveness and the issues, challenges and opportunities that boards face. Deloitte interviewed directors in Argentina, the Czech Republic, Finland, Germany, India, Ireland, Luxembourg, Mexico, the Middle East, Nigeria, the Philippines, Romania, Russia, Sweden and the United States. 35 directors from Ireland participated.
The interviews were conducted between September and December, 2013. Our report incorporates quantitative and qualitative data based on these interviews. Note that there was no normalization or weighting of country results, despite differences in numbers of directors interviewed. All the information provided by participants is treated confidentially and reported only in aggregate form. The names of the individual participants or their companies are not disclosed.
The views and opinions expressed in this report do not necessarily reflect the view of Deloitte Touche Tohmatsu Limited, Deloitte member firms, or the views of individual directors interviewed. We make no representation or warranty about the accuracy of the information, or on how closely the information gathered will resemble actual board performance or effectiveness. Due to rounding, responses to the questions covered in this report may not aggregate to 100.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ie/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The information contained in this press release is correct at the time of going to press.
Deloitte’s 1,300 people in Dublin, Cork and Limerick provide audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges.
Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.