Findings from PwC’s US 2014 Corporate Directors Survey shows 36 per cent of directors believe that a fellow board member should be replaced.
Newer directors are more likely to want a fellow director replaced than those who have been on the board for more than 10 years.
The percentage of directors who see impediments to replacing an underperforming director grew to 53 per cent from 48 per cent last year. A higher proportion of directors said the biggest impediment was that board leadership was uncomfortable addressing the issue.
Directors also cited a lack of director assessments and ineffective board assessment processes as further impediments to addressing director underperformance.
As to the reasons why more than a third of directors want to replace a fellow director, diminished performance due to ageing, lack of expertise, and not being prepared for meetings were cited as the top reasons for their dissatisfaction. There was also an increase in directors who believe a fellow director should be replaced for overstepping his/her oversight role.
When considering what to look for in a director once they managed to remove their underperforming peer, 93 per cent of US directors rated financial expertise as the most important attribute for directors. Industry, operational, and risk management expertise followed in importance.
The full report can be found here.
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