Director 360

“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.