US boards are struggling with the demands of an array of external challenges, according to a survey that takes a microscope to boardroom effectiveness in the current era. According to a poll of more than 600 C-suite executives, only 30% rate their boards’ performance as “excellent” or “good”.

The study, conducted by PwC and The Conference Board, a think tank, concludes: “While C-suite executives acknowledge their board’s proficiency in core oversight areas, they signal a need for upscaling in other areas of board oversight.

“The survey results suggest an underlying issue: a perceived gap in the board’s ability to pivot and adapt amid the whirlwind of rapidly evolving strategic challenges and business risks.”

The results reveal substantial concerns about the ability of boards to cope at a time when large companies are managing risk from geopolitical conflict, domestic political uncertainty, climate change and a paradigm shift in technology. Those risks are coupled with a high expectation that boards will consider the interests of stakeholders just as highly as those of shareholders.

Further results from the survey underpinned a belief among chief executives that boards may need to adapt. Only 19% could say their boards were “diverse enough”, while 92% say one or more directors should exit their boards, compared with only 39% in 2022.

Fewer than a third of CEOs (28%) could say they felt their boards were “armed” with the right skills and expertise. The survey reveals executives value industry, regulatory and sustainability expertise. Non-executives meanwhile, place a premium on finance, risk management and “operations acumen”.

The report concludes: “At a time of upheaval and fragmentation in the business landscape, this year’s survey paints a complex picture of the current state of board effectiveness from the perspective of C-suite executives.

Proficient yet deficient

“While there is recognition of the board’s proficiency in traditional oversight areas and confidence in the board’s resolve, there is a clear call for additional education in emerging areas.”

This is not the only report to uncover concerns about the way US boards work. Last month, headhunters Heidrick & Struggles published a report suggesting that non-executives increasingly involve themselves in operations. The report said directors were “grappling with the boundaries of their respective roles”.

The report added that it was happening because skills may be missing from executive teams.

The International Corporate Governance Network (ICGN), a club for investors, has asked whether boards are ready for the governance of artificial intelligence, while activists are asking for more AI disclosures.

Meanwhile, big investment managers, such as Norway’s Norges Bank, have recommitted themselves to pushing boards on ESG, despite a toxic political debate surrounding the topic in the US.

US boards appear to have hit a period of transition when skills, expertise and roles are being reevaluated. The PwC and The Conference Board research underlines that the moment is here.