Corporate boards just don’t spend enough time on strategy, strategic risk, technology, cyber-security, executive succession planning, or talent development in general. Or at least so say some 700 corporate directors and senior executives in 16 U.S. cities who participated in a KPMG roundtable series on how the board prioritizes its agenda.
It’s not small numbers of directors and executives who believe the board doesn’t spend enough time discerning the corporate strategy or strategic risks. It was three-fourths of all survey participants who said they’d like to see the board devote more of its agenda to strategy and the risks that might arise from strategy. The numbers were smaller, however, on the other areas.
A little more than one-third, for example, believe the board should devote more time to technology and cyber-security issues as well as succession planning for the CEO and other top executives. One-fourth said the board could spend more time on the talent pipeline in general, according to the survey.
So where does the board find all this additional time? Nearly 40 percent said they’d like to see the board spend less time on financial reporting and disclosures, while 34 percent said said they’d like to carve away from the time the board spends on audit and compliance. Sustainability and corporate social responsibility could also sacrifice some board time, according to 37 percent of respondents.
Still, one-fourth of respondents said they believe the board agenda is appropriately prioritized, so no changes are warranted. Roughly one-third said they believe the current annual average of 248 hours spent by board members on their board duties is just about right. Nearly 30 percent said they believe 248 hours is right, but they expect the commitment to increase going forward.
As business and risk become more complex, a board’s ability to prioritize its time and devote enough of it to substantive issues becomes more critical, says Dennis Whalen, leader of KPMG’s Board Leadership Center, which conducted the poll during its roundtable series. “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,” he said in a statement.