NACD Annual Survey Highlights 2020-2021 Governance Trends And Priorities

Directors Say More Time on Digital Transformation and Overseeing Diversity Is Needed

News provided by

National Association of Corporate Directors

Feb 25, 2021, 10:00 ET

WASHINGTON, Feb. 25, 2021 /PRNewswire/ -- The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 21,000 board members, today released the 2020–2021 NACD Trends and Priorities of the American Boardroom report, which provides an overview of the issues and trends that public and private company directors deem most likely to impact their boards in the coming year. It also analyzes their views about how effectively their boards allocated agenda time in 2020 and highlights where they seek to improve their performance over the current year.

This year's survey revealed a number of new and emerging challenges related to digital transformation, workplace safety, cybersecurity, talent management, and organizational diversity and inclusion. Boards are also taking a closer look at how the board functions internally and seeking opportunities to improve their impact on the organizations they serve.

"Directors are emerging from a tumultuous 2020 with a clear sense of the issues most impactful to their organizations," said Peter R. Gleason, NACD CEO. "Key trends for 2021 indicate an outsized focus will be required to keep pace with digital transformation while maintaining a safe and inclusive work environment for employees."

The report uncovers these key findings:

Trends impacting the future of work: Four of the top five trends that directors believe will most influence their organizations in 2021 reflect changes in the way that work gets done, including the increasing pace of digital transformation (50%), ensuring safe working environments for employees (49%), changing cybersecurity threats (39%), and increased competition for talent (38%).
Gaps in board oversight of digital transformation: Although 50 percent of respondents cited this as a key trend, 40 percent reported that their boards do not spend enough time focusing on digital transformation issues.
Greater exposure to diverse perspectives: Fully 43 percent of respondents reported that their boards do not dedicate sufficient time to the oversight of organizational diversity and inclusion efforts. Many seek greater board exposure to diverse voices and perspectives as well, with 28 percent indicating that they would like to see more board agenda time allotted for the board to hear presentations from a diverse array of management voices.
Virtual board meetings impact how directors allocate time: While the COVID-19 pandemic reduced time spent representing the board at public and in-person events, directors report time spent attending (virtual) board and committee meetings increased, as did time spent reviewing reports and materials from management and other internal sources.
More directors seeking training and education: While nearly half of respondents reported that their boards do not dedicate sufficient time to director education, time spent on education increased more than a third compared to last year, with the average independent public company director spending 33 hours on director education in the past 12 months, as directors sought information on rapidly evolving issues affecting their organizations.

The 2020–2021 NACD Trends and Priorities of the American Boardroom report, one of four governance surveys NACD produces annually, was fielded from November 19, 2020, to December 10, 2020, and included responses from more than 450 members. To download your copy of the report, visit here.

About NACD
The National Association of Corporate Directors (NACD) empowers more than 21,000 directors to lead with confidence in the boardroom. As the recognized authority on leading boardroom practices, NACD helps boards strengthen investor trust and public confidence by ensuring that today's directors are well prepared for tomorrow's challenges. World-class boards join NACD to elevate performance, gain foresight, and instill confidence. Fostering collaboration among directors, investors, and corporate governance stakeholders, NACD has been setting the standard for responsible board leadership for 40 years. To learn more about NACD, visit www.NACDonline.org.

SOURCE National Association of Corporate Directors