Increased reporting responsibilities may be eating into the time available for boards to discuss strategy, according to a key survey.
The latest annual Bellwether survey from the Chartered Governance Institute finds that 81% of those polled believe that the responsibility for corporate disclosures has reduced the time for conducting strategic discussions.
The figures suggest it may be boards in smaller companies that sustain the biggest impact, with 30% of boards in the FTSE 250 believing talk about disclosures had a “large effect” on time left for strategy. In the FTSE 100, the figure was just 17%.
However, although the time for strategy may have been cut to “some extent” in 55% of FTSE 100 companies and 65% of those in the FTSE 250, the institute believes that the “increase in reporting may be causing some concern but is, ultimately, manageable”. It points out that one fifth of FTSE 100 companies report no concern at all.
Succession success
Where there appears to be improvement is in the pipeline of talent for executive roles. More than half of those surveyed say their succession arrangements are “sufficient to provide a sustainable pool of talents and diverse board members…”. This was an improvement on last year’s 50%. Just 26% say that their pipelines are not in good shape.
There is good news elsewhere. A resounding 77% say their boards are “ethnically diverse”, though that figure rises to 92% for the FTSE 100 alone.
And although there has been distinct progress on women in boardrooms, the institute finds that while 94% of companies say their boards are “gender diverse”, 5% of respondents say their boards are “not diverse”.
The institute’s report says: “Clearly no female representation is a thing of the past in almost all FTSE 350 boardrooms. Now, more scrutiny is needed to assess which roles these women hold on boards and whether boards are gender diverse in all positions.
“It’s no longer enough for women merely to be represented on boards—there’s now also attention being paid as to whether they hold one of the top roles, such as CEO or chair.”
Peter Swabey, director of policy and research at the institute, says the survey means he is “tentatively optimistic” about the ability of companies to face the many challenges present in the current economic and political climate.
“As more challenges emerge over the coming year, boards and governance professionals will need to ensure they are well-equipped.”