Results of recent investor survey on board performance

Investor Perspectives: How investors are shaping boards today… and into the future
PricewaterhouseCoopers, October 2014

It is important for boards to understand investor perspectives, including their expectations of corporate directors and whether their expectations are being met. PricewaterhouseCoopers recently released the results of a US survey on investor perspectives, titled “Investor perspectives: How investors are shaping boards today… and into the future” (October 2014).

The survey shows that investors are generally happy with the way boards are assessing strategy (90 per cent satisfaction rate), overseeing risk (84 per cent satisfaction rate), and maintaining board expertise (84 per cent satisfaction rate). This is a good result, particularly given that strategy assessment and risk oversight are two of the most important board responsibilities.

Yet investors believe that there remain areas for improvement. The survey shows that 61 per cent of responding investors are dissatisfied with how boards are assessing director performance, while 48 per cent are unhappy with current shareholder engagement practices. The survey also shows investors to be dissatisfied with certain information being provided to them, including in relation to cyber risks (55 per cent), climate change risks (58 per cent), and key performance indictors about risk management objectives (45 per cent). Further, 40 per cent of surveyed investors do not believe that boards understand emerging risks that can impact their company.

An issue that continues to surface is the possibility of limiting the number of boards on which directors may sit. The survey shows that 94 per cent of respondent investors believe that boards should revisit this issue.