The new top-level focus for private boards is the search for talent across the enterprise. Filling positions with qualified candidates from the C-suite to the mailroom now ranks as the primary threat — and opportunity — for private company organizations of all stripes.
Members of the Private Company Director Directors to Watch Class of 2022, as well as engaged past honorees, participated in a pulse survey conducted in February. Of the 70 directors contacted, 23 provided complete replies, some with additional commentary. We offered our respondents a dozen “board meeting agenda items,” along with an invitation to cite additional concerns, and asked them to rank the topics under discussion by their primary boards.
Close behind talent acquisition are the surge of ransomware attacks and associated data and cybersecurity issues, followed by logistics and the fragility of the supply chain. Coming in at fourth place, according to our survey, are, generically, lessons learned from the pandemic.
Commenting on those lessons, director Susan Ehrlich noted that “digital transformation in how we work and how we serve customers” has had a widespread impact on many issues private company boards face in “the new normal,” especially in the cybersecurity arena. Director Linda L. Lin elaborated, saying, “In addition to COVID lessons and supply chain being key issues for ourselves and for our clients, there is a major knock-on effect that is sustaining financial performance without compromising brand or principles.” For many companies, Lin opines, the pandemic has put tremendous strain on margins: “To cope might mean selling lower-quality products because desired products are unavailable, reducing service standards because staffing is unavailable or steeply raising prices to compensate for reduced volume.”
In the middle of the pack are diversity, equity and inclusion; creating metrics to measure ESG efforts and compliance; executive compensation and associated pay issues — especially as they relate to the current inflationary spiral — and then climate change and environmental sustainability.
At the bottom of the list of topics are tone at the top; engagement with shareholders and greater accessibility of directors and the CEO to external inquiries; the expanding scope of private company director duties as compliance, disclosure and scrutiny move closer to public company norms; and participation in political discourse, specifically the role of the CEO and the board.
The replies from our Directors to Watch participants were not categorized by industry sector or company size, or any other parameters, so a director of a shipping company or manufacturing firm might have prioritized supply chain and logistics issues higher than, for example, a director of a banking institution. The results of our February 2022 pulse survey are, in large part, consistent with past polls conducted by Private Company Director and its sister title, Directors & Boards, and serve only as a comparative basis for considering the top issues facing your own boards and markets.