Strategic Planning Concerns Top the Private Board Agenda
Growth and talent are also major issues for private company boards.
As part of her introduction on day two of The Private Company Governance Summit 2022, Carey Oven, national managing partner for Deloitte’s Center for Board Effectiveness, asked a question that earned nods from most attendees.
“Do you all feel like you’ve been a little bit busy?”
She then proceeded to detail the many trends that have been on the agendas for board directors.
Citing Deloitte’s survey of public and private boards, conducted in partnership with Private Company Director, Oven discussed topics at the top of the board’s agenda. Boards are focusing on talent; not only the recruiting of new personnel in a competitive marketplace, but also ensuring that the wellness of current staff is being maintained, and that diversity and inclusion are top priorities. ESG remains a major talking and action point, with boards being asked to consider how their companies are affecting the environment and addressing climate change. There is also a focus around technology, the rapid acceleration of which brings about questions on new risks and opportunities, even as existing ones are still being figured out. And, as Oven says, many boards are looking inward, resetting on the fundamentals of good governance and using the conclusion (or at least the slowing) of the pandemic to examine how they can bolster their own effectiveness.
“There’s a lot of you that are thinking ‘Okay, we’ve been through a crisis period, or multiple crisis periods. How do we step back and rethink our board composition, how do we structure agendas, how do we work with management and how do we govern effectively?’”
Half of the private company respondents to Deloitte’s survey said the pandemic had a “moderate impact” on their board’s overall processes and practices. Just 17% of private companies reported an increase in the number of board meetings held, and 28% implemented a protocol of mixed in-person and virtual-only meetings.
Because recent events required agility, this might seem like the right time to perform a board self-assessment. However, a question regarding the frequency of board self-assessment netted mixed results from Deloitte’s private company respondents. While 41% are performing a board self-assessment annually, 23% reported that their boards “have never conducted a board assessment,” 15% undergo assessment every 2 to 3 years and 14% schedule the checkup on an as-needed basis.
“About 25% of companies have not done an assessment. If you are one of those, I would say the time is now,” says Oven. “It’s important that you look ahead with your board.”
Strategic planning checked in as the highest priority for the boards surveyed, with growth factors (such as inflation, supply chain and acquisitions) a close second. Concerns around talent rounded out the top three. Each of these topics was ranked among the top three priorities by approximately 60% of boards surveyed. The topics that aren’t yet pushing the needle for the responding private company boards included ESG, crisis management and readiness, and DEI, all of which were noted as top priorities by fewer than 10% of respondents.
Of the respondents, 51% state that they would like to see more of a focus on talent, with growth factors claiming the same percentage. Meanwhile, 46% would like to drive more spotlight to strategic planning issues. Oven called attention to the 23% of respondents who noted cybersecurity and data privacy as an area that requires more attention.
“Directors should be thinking about things like, ‘Has the board been through a cyber event, simulation or game that helps them think about what they could do in the event of an incident?’ Because our cyber experts will tell you it’s not if, but when, a cyber event will happen.”