More than a third of directors say someone on their board should be replaced, PwC survey shows
Corporate directors in the US have become more sensitive about low support for board nominees in the past year and are more likely to think somebody on their board should be replaced, according to PwC’s 2014 Annual Corporate Directors Survey.
About 56 percent of directors surveyed in 2014 say negative votes of between 11 percent and 25 percent against a board nominee would make them concerned, compared with less than half of directors surveyed last year, PwC says.
And the number of directors who say somebody on their board should be replaced has jumped to 36 percent this year from 31 percent when the same question was asked two years ago, PwC adds. The main reasons cited this year include diminished performance due to aging, lack of expertise and poor levels of preparation for board meetings.
‘Corporate governance continues to evolve,’ says Mary Ann Cloyd, leader of PwC’s center for board governance, in a press release announcing the results of the survey. ‘We structured this year’s survey to gauge director sentiment on a number of key governance trends shaping the board of the future. Two of these trends involve how board performance and board diversity are taking center stage.’
The survey also shows that more than 60 percent of female directors consider boardroom gender diversity ‘very important’ while only a third of male directors say the same. Forty percent of women say racial diversity on a board is ‘very important’ while a quarter of men give the same answer.
Almost a third of the male directors surveyed have been on their boards for more than 10 years, while only 10 percent of the women have served for more than a decade. The survey also shows a trend toward increasing board gender diversity: 24 percent of all directors appointed in the past two years were women, although women account for only 18 percent of current board positions.
