2016–2017 NACD

Public Company Governance Survey

Public Company Directors’ 2017 Outlook

As regulators’ and investors’ expectations of boards continue to grow and the rapid pace of business change continues, directors are seeking affirmation that their governance practices are effective, fit for purpose, and clearly communicated to stakeholders. It is therefore no surprise that annually more than a thousand directors and executives participate in NACD’s public company governance survey. They find value in benchmarking their approach in areas such as board structure, composition, education, recruitment, and evaluation year over year, and use the results to identify opportunities for improvement and validate board practices.

This year’s survey offers great insight into how directors and boards view the next 12 months. What major business trends do they believe will most greatly impact their companies? In which areas do they plan to improve board performance next year? On which topics do directors want to spend more time in board meetings? In addition, we assess how boards are currently engaging with management on the increasingly complex challenge of formulating strategy and drill down on the growing board imperative of cyber-risk oversight. 

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Key Findings

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Global Economic Uncertainty a Top Concern for 2017
Respondents report that global economic uncertainty, industry changes, growing regulatory demands, cyberattacks, and business-model disruptions will most signifi­cantly affect their companies over the next 12 months. Global economic uncertainty was selected by 60% of respondents as one of the five trends that will have the great­est impact on their companies, most likely in light of ongoing economic turbulence that includes the fallout from Brexit, emerging markets volatility, and the aftermath of the U.S. election.

What Five Trends Do You Foresee Having the Greatest Effect on Your Company Over the Next 12 Months? Respondents could select up to five trends from a list of 16. Bars represent the percentage of respondents selecting a trend. Only the five most widely shared trends are shown.

2017 Priority Focus on Strengthening the Board’s Role in Strategy Development
For more than half of boards, active involvement in the development of strategy is one of their goals for major improvement over the next 12 months. Recognizing that successful strategy setting and execution in this volatile environment are a chal­lenge, boards are eager to move from the traditional review-and-approve process to more active strategy engagement earlier and on an ongoing basis

For your board, how important are improvements in the following areas over the next 12 months? (Top 5 most important improvement area are presented)

Information Rich, But Insight Poor
Not surprisingly, given the demanding business context, respondents report that they spent on average 12 more hours reviewing materials before board meetings than they did last year. And these materials may not be good enough; almost 50% of respondents want to see improvement in the quality of management information in 2017.

Director Time Spent on Board Activities

Discomfort Around Cyber-Risk Oversight Persists
Directors continue to wrestle with effective oversight of cyber risk. Fif­ty-nine percent report that they find it challenging to oversee cyber risk, and only 19% of respondents report that their boards possess a high level of knowledge about cybersecurity. Only 37% of respondents feel confident and just 5% feel very confident that their companies are properly secured against a cyberattack.

How would you rate your board’s understanding of cybersecurity risks?

NACD members:
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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.