Self-evaluation and increased communication with analysts and stakeholders also showing heightened impact, according to PwC survey
More than half of directors of large corporations are spending more time working on board-related matters such as scrutiny of director performance and pay rises, according to the PwC 2012 Annual Corporate Directors Survey.
More than half (56 percent) of directors say they spent more time on board work in the past year, with 67 percent of those reporting a 10 percent increase in working time, according to the PwC survey. One in five directors surveyed say their working time increased by 20 percent or more.
At the same time, 64 percent of companies say they responded to ‘say on pay’ votes with action, according to the survey.
Forty-one percent of those say they modified proxy statement compensation disclosures, while 29 percent made compensation more directly related to performance and 23 percent intensified their communications with proxy advisory firms. Twenty-one percent of companies say they modified their compensation plans.
‘Corporate directors are in the spotlight as never before,’ says Mary Ann Cloyd, leader of PwC’s Center for Board Governance, in a statement.
‘PwC’s Annual Corporate Director Survey shows an attitude shift among directors grappling with change, indicating their progress to date, and reveals ways to enhance performance and adjust to the altered landscape.’
The survey, which covers 860 public directors in 2012 – more than 70 percent of whom serve on the boards of companies with more than $1 bn in annual revenue – also shows that 31 percent of directors feel somebody needs to be replaced on their board.
The most commonly cited reason, with 15 percent of respondents, is the perception of declining performance due to ageing. Next comes a perceived lack of expertise, cited by 13 percent of directors surveyed.
Most board members also say their companies have increased communications with various stakeholders and third parties, with 27 percent saying they have boosted communications with institutional shareholders in the past year.
At the same time, 22 percent say they now communicate more regularly with analysts and 22 percent cite increased communication with employees. Increased communications with the media is cited by 8 percent of respondents.
PwC says 66 percent of directors surveyed cite changes made in their company directly as a result of board self-evaluations in the past year, with 35 percent of the total surveyed saying they decided to seek additional expertise.
Almost one in three say they decided to change the composition of board committees and 16 percent made the decision to change the frequency of board meetings.
Only 2.2 percent of those surveyed say their companies did not conduct any board or individual evaluations.
