Despite having to face new challenges in today's technologically advanced work environment, corporate boards feel they have all the right pieces to do the job, new research shows.
A study by Corporate Board Member and executive search firm Spencer Stuart revealed that 88 percent of U.S. corporate directors believe their boards already possess the right skills to compete in the current environment, despite a number of emerging concerns such as cyberthreats and social media. In total, just 291 new independent directors joined the boards of S&P 500 companies last year, compared with the 401 who joined a decade earlier.
Julie Daum, co-head of the North American Board and CEO Practice for Spencer Stuart, said the lack of turnover should be cause for caution.
"Directors have to oversee many factors that didn't exist 10 years ago, due to new technologies, social media and more complex global issues," Daum said. "It’s a bit surprising when there is such little turnover, that directors believe they have the right expertise already on their boards."
Of all the issues facing corporate boards today, the study found that cyberthreats might be the most daunting, with nearly three-quarters of those surveyed feeling that a cyberbreach was of concern.
In addition, 74 percent of corporate directors think planning for emergency succession — the kind that happens abruptly due to unforeseen circumstances — is a chief worry.
Daum said the regular discussion of and planning for unexpected senior-level turnover is a change from the past for corporate boards.
"This marks a significant shift," Daum said."In the past, the CEO drove succession planning — now boards do it."
Continuing to be an issue of great anxiety is keeping shareholders informed of company developments, especially under the new requirements of the Dodd-Frank Act, which mandates companies hold regular shareholder advisory votes on executive compensation.
"One way or another, boards have to come to terms with what to do when their shareholders knock on the door and have questions for the directors that represent them," said T.K. Kerstetter, chairman of Corporate Board Member. "This is an area of great debate right now."