2019–2020 <br />NACD Public Company Governance Survey

2019–2020
NACD Public Company Governance Survey

The Current State of the American Boardroom

As in past years, the NACD Public Company Governance Survey report explores a wide variety of the topics that make their way onto board agendas. This report serves as a valuable resource for boards that are seeking affirmation that their governance practices are effective, fit for purpose, and clearly communicated to stakeholders. The trends and insights highlighted here can help boards assess priorities, explore emerging business themes, and evaluate the effectiveness of their oversight practices and their governance approaches. Specifically, this year’s report offers detailed insights into

  • board size and structure,
  • board composition,
  • director priorities and trends, and
  • key oversight practices.

Access the Press Release

Key Findings

  • Public companies face a conundrum navigating two divergent business forces

    Directors identify growing business-model disruptions (52%) and a slowing global economy (51%) as the top trends most likely to impact their organization over the next 12 months. While not contradictory, these divergent trends create a challenge for many companies: how to balance a growth and disruption mind-set to stave off competition with preparations for the impact of a potential recession. 

    What five trends do you foresee having the greatest effect on your company over the next 12 months?

    Five Trends
  • For most companies, current strategies will become irrelevant in the next five years.

    Sixty-eight percent of directors report that their company can no longer rely on extending the company’s historical strategy over the next five years. Future growth will likely depend on the adoption of a different business model and an entirely new set of assumptions about what success will look like. Already, directors are skeptical about the validity of many core management assumptions including the nature and strength of competition (50%), growth forecasts (50%), technology change (48%), and macroeconomic projections (46%).

    Our company can no longer count on extending our historical strategy over the next five years (percentage of directors).

    Strategy Percentage
  • ESG is becoming commonplace in the boardroom, though more work remains.

    Nearly 80 percent of public-company boards now engage with environmental, social, and governance (ESG) issues in some meaningful way. Most focus on ensuring linkages to strategy and risk. Discussions with investors often center on elements of the “S” (“social” issues), with an emphasis on human capital (65%) and diversity (74%).          

    Top ESG Oversight Practices

    ESG Graph

Media Coverage

Small U.S. companies slower to add female directors to their boards: study
Reuters

Small caps lag in adding women to boards
IR Magazine

Key Board Takeaways From This Year's NACD's Public Company Survey
Forbes

Cybersecurity Strategy: The Business Risk of Being Caught Unprepared
Forbes

About NACD's Public Company Governance Survey

NACD annually surveys its membership community on key board governance practices and major business trends. We analyze our rich survey data to deliver insights on the state of board governance for public and private companies in a wide range of areas, including board structure, composition, recruitment, diversity, strategy, risk oversight, and shareholder engagement. We also offer custom benchmarking support for members who want to assess how their approach in specific governance areas compares to their peers. Click here to learn more about our board benchmarking services.