NACD Publishes New Reports Forecasting Top Issues for 2022 and Detailing Insights into American Boardrooms
- 2022 Governance Outlook Report Points Overwhelmingly to Competition for Talent as Greatest Trend Impacting Business in 2022
- Public Company Boardroom Report Reveals Public Company Directors Have More ESG Skills and Boards Have a Narrowing Gender Gap
WASHINGTON, DC (December 30, 2021)– The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 22,000 board members, today released the 2022 Governance Outlook: Projections on Emerging Board Matters, which provides data and insights on the issues that corporate directors and senior executives will contend with in the coming year, and the 2021 Inside the Public Company Boardroom report, which offers data-backed insights into the current state of the American boardroom.
Paired together, these reports are designed to provide the information board directors and senior executives require as they set their agendas for the year ahead.
"What we have learned from our research is that COVID-19 variants, supply chain disruptions, and inflationary pressures will continue to put pressure on the boardroom in 2022," said Peter R. Gleason, president and CEO of NACD. "It is also clear that larger social issues, such as environmental, social, and governance (ESG) and diversity, equity, and inclusion (DE&I), are inspiring an evolution of who is at the table and which skills they possess. In response, NACD will continue to provide insightful research, certification, and programming to support the work of directors and the governance community."
Key Findings From 2022 Governance Outlook: Projections on Emerging Board Matters
Competition for Talent Will Be Tougher Than Ever: Seventy percent of directors report that finding and recruiting top talent will be atop the list of trends to impact their organizations over the next 12 months. Other issues on their minds for 2022: increasing the pace of digital transformation, 42 percent; supply chain disruptions, 40.8 percent; changing cybersecurity threats, 38.7 percent; and, growing inflation, 34.9 percent. (2022 Governance Outlook)
Increased Focus on CEO, Board Succession Planning: Trendlines point to a growing importance of succession planning both for CEOs and other board members. Many directors note that relationships between boards and CEOs have grown more important since last year, continuing a pattern seen since the start of the pandemic. In addition to board succession planning, expect a greater focus on director onboarding and education in the coming year. (2022 Governance Outlook)
COVID-19 and Other Disruptions Aren"t Done Yet: New variants of COVID-19, supply chain delays, and inflationary pressures will continue to pose challenges for company boards in 2022. Meanwhile, social concerns like DE&I and ESG will keep boards and executive teams focused on progress in those realms. (2022 Governance Outlook)
Key Findings From the 2021 Inside the Public Company Boardroom Report
ESG and Human Capital Skills Are in High Demand: The amount of directors with strong ESG and human capital skills has doubled since 2018 as companies increasingly value directors and candidates with these in-demand qualities. What"s more, boards are increasing their oversight of ESG practices, with 51 percent of boards disclosing oversight of ESG/sustainability, up from 34 percent just a year ago. (2021 Inside the Public Company Boardroom)
The Gender Gap Continues to Narrow: If trends continue, boards will be 50 percent female by 2035. Males composed about 87 percent of outgoing directors this year compared with 63 percent of incoming directors. The overall gender balance in the Russell 3000 Index is approximately three men for every one woman on a board, which stands in contrast to 2018, when the ratio was five male directors for every one female director. Also, gender imbalances in board leadership positions saw a slight year-over-year decline. As a whole, gender imbalances were less prevalent on boards with greater percentages of independent members. (2021 Inside the Public Company Boardroom)
Virtual Meetings Continue: Seventy-seven percent of companies surveyed held their annual meetings virtually this year, an 11 percent uptick from 2020. Only 22 percent of board-related meetings were held in person for Russell 3000 Index organizations this year. (2021 Inside the Public Company Boardroom)
New Directors Know Finance, Tech, and Marketing: Incoming board directors in 2021 had more skills and experience in finance (53 percent), technology (35 percent), and marketing (20 percent) than incoming directors in 2020 reported (44 percent, 30 percent, and 16 percent, respectively). Outgoing directors" top skills include management and strategic vision. (2021 Inside the Public Company Boardroom)
About NACD Reports
The NACD report 2022 Governance Outlook: Projections on Emerging Board Matters, produced in partnership with Broadridge Financial Solutions, Deloitte, and FTI, provides a roadmap to help guide board members as they navigate issues they are likely to face in the next year, including environmental, social, and governance (ESG) practices; cybersecurity risks; and liability threats and other insurance considerations.
The NACD 2021 Inside the Public Company Boardroom report analyzes information from the boards of Russell 3000 Index companies to offer a real-time snapshot of key trends and detailed breakdowns of gender diversity, average tenures, in-demand skills, and more. NACD published a companion report on private company boards in September.
For more than 40 years, NACD has been on the leading edge of corporate governance, setting standards of excellence that have elevated board performance. NACD arms today"s directors with insights and education that drive their mission forward, while preparing a new generation of boardroom leaders to meet tomorrow"s biggest challenges. NACD is a community of more than 22,000 directors driven by a common purpose: to be trusted catalysts of economic opportunity and positive change — in businesses and in the communities they serve. To learn more about NACD, visit nacdonline.org.