Study: The “New Normal” Concerns Facing Governance
Shifting work styles may raise concerns for boards, according to a National Association of Corporate Directors survey, but directors, overall, haven’t lost confidence in the organizations they serve.
According to a new survey from the National Association of Corporate Directors, the shifting definition of normalcy is creating rising concerns for boards.
In the May edition of NACD’s COVID-19 Pulse Survey, more than half of the board members (54 percent) surveyed said that changes in work style were one of their largest concerns for their organizations over the next three months. In a blog post highlighting the research, NACD Senior Manager of Governance Analytics Barton Edgerton pointed to accelerating digital transformation as a key change—one cited by 32 percent of respondents.
“There is a strong consensus that, at least in the near term, companies will need to find ways to get work done differently than before the crisis and that some of this will likely be fueled by the acceleration of digital transformation,” Edgerton stated in the post.
Other concerns of note for corporate directors include shaping realistic post-crisis strategies (60 percent), ensuring the health and safety of employees (49 percent), getting up to speed on the crisis’ risk dimensions (46 percent), striking a balance between governance and management (45 percent), and overseeing the financial health of the organization (45 percent). These top-level concerns have pushed those about board governance (e.g., succession planning, onboarding) to near the bottom of the list.
At this time, nearly half of board directors (48 percent) expect to spend more time with the organization’s management than they did before. Many of those meetings are virtual in nature, of course, but feelings of effectiveness are mixed: just under half of respondents say that virtual meetings aren’t as effective as in-person meetings, a third feel they are just as effective.
“Coming out of the crisis, one can likely expect more frequent board engagement with management, in new and often virtual ways, and between the traditional quarterly meetings on the boardroom calendar,” Edgerton added.
Overall, the crisis has not changed board confidence in the organizations in which they serve. The survey found that directors, on average, gave their organizations a 3.8 on a 4-point GPA scale, with 92 percent saying that they think their organizations will survive the crisis.
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