Poverty and inequality occupy boards just as much as strategy and profit
Findings from the inaugural Global Director Survey 2018 show poverty and income inequality as the top concern for directors around the world, closely followed by taxation and government spending, and the cost of healthcare. The Global Network of Director Institutes (GNDI) released the findings on 20 September 2018.
“The survey highlights that directors around the world share similar concerns and challenges as they look to the future for the organisations they govern,” said GNDI Chair Angela Cherrington, who is also the Chief Executive of the Institute of Directors in Southern Africa (IoDSA).
“Within the global picture, regional findings showed poverty and inequality were most concerning for governance communities in Africa-Middle East and Asia-Pacific. Taxation was the biggest concern for directors in the Americas, while directors in Europe were most concerned about the cost of healthcare.”
The Global Director Survey was conducted over six weeks from mid-May to end of June 2018 by the Institute of Directors of New Zealand on behalf of the GNDI.
2,159 directors from 17 countries participated in the survey. 53% of participants served on three to four boards, indicating solid experience and broad insights. 36% were on boards of private companies, 23% were on boards of listed companies, and 22% were directors of not-for-profit organisations.
“This survey helps us to understand the big challenges, opportunities and trends emerging globally for directors working with organisations around the world. Directors have a critical role in society as agents of good governance and as decision makers driving future investment and growth.”
The Global Director Survey Report 2018 provides wide-ranging insights into the topics that are top of mind for directors worldwide, including social and economic issues and risks, business confidence, governance practices, technology and data governance.
Big Data top technological disruptor
Big Data also ranked high on the global agenda as a potential disruptor – 63% of directors from around the world regarded Big Data as the top technological disruption to their organisations.
“Although Big Data is on the governance radar, many boards are not taking advantage of it to improve effectiveness, boost performance, mitigate risks and improve data privacy,” said Cherrington. “There are immense potential benefits from data and data analytics, alongside equally significant privacy risks.”
The Global Director Survey found that though 61% of directors had good or excellent understanding of their organisation’s data privacy practices, 37% felt they had limited or no understanding.
53% of directors surveyed believed their boards understood cybersecurity and cyber-risks to their organisations.
“Boards have a key leadership and oversight role in data governance. For a board to ask management the right questions and hold management to account, they need to understand and address data privacy and cybersecurity issues as they arise.”
Focus shift to triple bottom line
Ethical behaviour, health and safety and employee engagement were of particular relevance to the directors surveyed.
Environmental issues rated lower in the survey, however, Cherrington expects that over time environmental issues will be more on the board radar.
“Wider environmental concerns can impact the sustainability of organisations long-term,” explained Cherrington. “The environment, climate change, carbon-related issues and resource management will become more important and part of the conversation for more countries as the Paris Accord and United Nations Sustainable Development Goals get more attention.”
Directors’ business confidence generally positive
The Global Director Survey 2018 also probed directors’ business confidence. The survey found 45% of directors were “mostly” or “very confident” about prospects for growth over the coming year. Another 36% were “moderately confident”. Private and listed companies were more confident than not-for-profit and government organisations.
The GNDI is an international collaboration that shares expertise in directorship and corporate governance. GNDI collectively represents more than 130,000 individual directors and governance professionals. It aims to develop and promote leading practices and programmes that enhance the capability of directors to drive sustainable performance for the benefit of shareholders, the economy and society.
The full 43-page Global Director Survey Report 2018 is available at bit.ly/gndidirectorsurvey