Survey: Private Company Boards Know the Importance of AI, But Don’t Talk About It
Plus, valuable insights on climate change, board culture and more.
The recently released 2023 NACD Private Company Board Practices and Oversight Survey provides insight on several topics of prominence in private company boardrooms, including ESG, AI and human capital.
The survey, which drew responses from over 200 private company directors, revealed the following statistics:
- At this early stage of AI’s relative development, there is certainly a chasm between the importance directors think AI will have on their businesses and the amount of time that is spent talking about it in board meetings. Ninety-three percent of responding directors feel that increased adoption of AI tools will affect their businesses, but just 23% say AI is a regular talking point in meetings. Furthermore, just 7% believe their management team is “very or extremely proficient” in AI issues.
- While ESG has been around for a long time (some would say even longer than the acronym has been around), that does not mean boards have their strategies all figured out. While 55% of respondents believe that ESG creates long-term value for their organizations, just 30% say discussion of ESG has increased in priority at board meetings. And over a third of respondents (38%) say their board has not been effective in integrating ESG into overall company strategy.
- Temperatures may be heating up across the globe, but that has not stopped private company boards from putting issues related to climate change on the back burner. Just 22% of survey participants said discussion of climate change has increased over the last two years. Over a third of those surveyed (37%) said it was not a concern for their company.
- Private company boards are lagging their public counterparts in the area of human capital oversight. Just 28% of respondents say their boards have assessed human capital experience and expertise to identify gaps, a number that sits at 52% for public company boards. Just 26% of responding directors say their boards have evaluated the effectiveness of human resources leadership at their company, while only 23% have reviewed existing charters to ensure proper oversight of human capital.
- When it comes to barriers to sustaining a strong board culture, 21% of those surveyed identified problematic individuals as a barrier standing in the way of director harmony, and 27% chose lack of diverse perspectives as a major obstacle.