NACD Private Company Governance Survey
The State of Private Company Governance
Against the backdrop of the COVID-19 pandemic, the business environment is becoming increasingly complex. As directors seek to understand whether their boards' governance practices align with those of their peers, the 2019–2020 NACD Private Company Governance Survey offers insight into the priorities, challenges, and composition of private company boards.
Disruptive trends are top of mind for private company directors.Even before the prolonged COVID-19 crisis, private company directors rated a number of fast-moving trends as those most likely to impact their organizations this year. Many of these are related to technology changes. Fifty-nine percent included the impact of business-model disruptions in their top five, closely followed by the increased competition for talent (57%), changing cybersecurity threats (54%), and the accelerating speed of advances in technology (43%).
Top trends that can effect your company over the next 12 months (respondents could select their top five)
Boards recognize that there is a danger that their strategies will quickly become irrelevant.Nearly two-thirds of private company directors (62%) report that their companies can no longer count on extending their current strategy over the next five years, and this majority has likely only grown since the start of the COVID-19 crisis. Only half of private company boards (50%) report that risk reporting allows the board to easily draw the right conclusions and deliver effective governance.
To what extent do you agree or disagree with the following statements? (percentage of directors)
Before COVID-19, only half of private company boards discussed environmental, social, and governance (ESG) matters.Only 51 percent of private company boards have focused on ESG over the past 12 months, compared to 80 percent of their public company peers. Most private companies focus on the S—the social element—of ESG. Seventy-two percent of private company boards rated human capital management as the ESG issue of greatest concern to them.
ESG−related issues of greatest concern to the company (percentage of boards)
About NACD's Private Company Governance Survey
NACD annually surveys its membership community on keyboard governance practices and major business trends. We analyze our rich survey data to deliver insights into 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 that of their peers. Click here to learn more about our board benchmarking services.