Aligning board talent with strategy a key challenge

Aligning board talent with strategy a key challenge

KPMG survey cites hurdles in shaping boardroom skills and diversity for company’s future needs

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Three-quarters of directors say the alignment of board talent with the company’s long-term strategy is a critical challenge for their board, and three in five cite a need for greater diversity of backgrounds and viewpoints on the board, according to a global survey by KPMG’s Audit Committee Institute. Survey respondents also cite significant barriers to refining the board’s makeup, from finding directors with the right mix of skills and overcoming “status quo” thinking to lack of formal succession plans. 

 

“Having the right talent in the boardroom is critical to a company’s long-term success,” said Timothy Copnell, head of the UK Audit Committee Institute. “But achieving the right diversity of boardroom skills, backgrounds, and experiences to position the

 

To better understand how directors are thinking about the mix of skills, backgrounds, experiences, and perspectives in the boardroom—and tools and approaches to achieve the right mix—KPMG’s Audit Committee Institute surveyed more than 2,300 directors and senior executives across 46 countries. 

 

Directors see significant room to refresh or refine the board’s makeup: only 36 percent said they are “satisfied,” and 49 percent “somewhat satisfied” that their board has the right combination of skills, background, and experiences to probe management’s strategic assumptions. The survey also identifies key challenges or barriers to building high-performing boards, as well as steps boards are taking to overcome these hurdles and position themselves as strategic assets for their companies.

 

The views and practices reported by UK audit committee members (as detailed in the survey report) closely mirrored the key global trends. Specifically, in the UK:

 

  • Board composition—and alignment with strategy—is a key priority. Survey respondents identified several reasons for the intense focus on board composition, including the need for directors with an understanding of the competitive environment, greater diversity of viewpoints and backgrounds, and understanding the pace of technology change and the potential disruptors of the company’s business model.
  • Significant barriers exist to building a high-performing board. The barrier most frequently cited by survey respondents was “finding directors with both general business experience and specific expertise needed by the company” (82 percent). Identifying the board’s future talent needs ranked second (67 percent), followed by resistance to change due to “status quo” thinking (37 percent).
  • Despite wide recognition of the importance of succession planning in achieving optimal board composition, many boards lack a formal succession plan. While the vast majority of survey respondents said that a formal board succession plan is a key mechanism to achieving the right board composition, only 58 percent reported having either a “formal succession plan in place that aligned with the company’s future needs” (21 percent), or “robust discussions and succession planning in process” (37 percent).

 

Read the report: Building a Great Board

 

About KPMG’s Audit Committee Institutes

KPMG’s Audit Committee Institutes (ACI) champion outstanding corporate governance to help drive long-term corporate value and enhance investor confidence. ACI engages with directors and business leaders across 35 countries, delivering actionable thought leadership on risk and strategy, talent and technology, financial reporting and audit quality, and more. www.kpmg.co.uk/aci

 

About KPMG

KPMG in the UK, is member of a global network of professional firms providing Audit, Tax and Advisory services. KPMG operates in 155 countries and has more than 162,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

 

For further media enquiries please contact:

Margot Cowhig Senior Manager, Press Office, Audit, Policy and Government

Corporate Affairs

KPMG LLP15 Canada Square

London, E14 5GL

T: +44 (0) 20 7694 4246 / Internal   781 4246

M: +44 (0) 7920 274856

E:  margot.cowhig@kpmg.co.uk

Twitter: @margotcowhig

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