KPMG said that getting board composition right and ensuring alignment with strategy—is a key priority. Survey respondents identified several reasons for the intense focus on board composition, including the need for directors with an understanding of the competitive environment, greater diversity of viewpoints and backgrounds, and understanding the pace of technology change and the potential disruptors of the company’s business model.
The report suggests that directors believe there are significant barriers to developing a high performing board. The barrier most frequently cited by survey respondents was “finding directors with both general business experience and specific expertise needed by the company” (69%). Identifying the board’s future talent needs ranked second (55%), followed by resistance to change due to “status quo” thinking (43%).
The survey also found that while directors recognise the importance of formal succession planning in achieving the right balance of skills and experience on a board only 31% reported having either a “formal succession plan in place that aligned with the company’s future needs” (14%), or “robust discussions and succession planning in process” (17%). However, directors surveyed by KPMG see significant room to refresh or refine the board’s makeup; only 36% said they are “satisfied” and 49% “somewhat satisfied” that their board has the right combination of skills, background, and experiences to probe management’s strategic assumptions.