For many years, Heidrick & Struggles has been tracking the trends that have shaped the global governance arena, including important long-term changes in board independence, diversity, financial oversight, risk management, and the shareholder base the directors serve.
More recently, we have been helping our clients understand the expanding environment in which they are operating. How is the role of business in society changing? What are the implications for directors? What does the future hold?
Our 2024 Board Monitor reports draw on the results of two recent surveys of CEOs and directors around the world to describe how directors and CEOs are answering six questions that are reshaping the boardroom.
Six questions reshaping the boardroom
Copyright @ 2024 Heidrick & Struggles International, Inc.
All rights reserved. Reproduction without permission prohibited.
CEO & Board Practice
Heidrick & Struggles’ CEO & Board Practice has been built on our ability to execute top-level assignments and counsel CEOs and board members on the complex issues directly affecting their businesses.
Europe CEO & Board of Directors Practice
Kit Bingham
London
kbingham@heidrick.com
Alice Breeden
London
abreeden@heidrick.com
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In November 2023, Heidrick & Struggles fielded an online survey that garnered responses from 3,156 respondents. Of those, 2,320 respondents were CEOs and 836 were non-executive directors. Forty-one percent were in Europe; 38% in North America; 10% in Asia Pacific; 4% in both Latin America and the Middle East; and 2% in Africa. Respondents represented companies of all sizes; 23% reported annual revenue of US $1 billion or more. Companies ranged across all industries.
In February 2024, Heidrick & Struggles fielded an online survey that received responses from 2,653 respondents. Of those, 1,927 respondents were CEOs and 726 non-executive directors. Thirty-seven percent were in Europe; 37% in North America; 9% in Asia Pacific; 4% in the Middle East; 3% in Latin America; and 1% in Africa (and 9% N/A). Respondents represented companies of all sizes; 26% reported annual revenue of US $1 billion or more. Companies ranged across all industries.
This analysis is part of Heidrick & Struggles’ long-standing study of trends in board composition in countries around the world. Produced by our global CEO & Board Practice, these reports track and analyze trends in non-executive director appointments to the boards of the largest publicly listed companies in Australia (ASX 200), Belgium (BEL 20), Brazil (BOVESPA), Canada (TSX 60), Colombia (COLCAP), Denmark (OMX Copenhagen 25), Finland (OMX Helsinki 25), France (CAC 40), Germany (DAX and MDAX), Hong Kong (Hang Seng), Ireland (ISEQ), India (Nifty Top 200), Italy (FTSE MIB), Mexico (BMV IPC), the Netherlands (AEX), New Zealand (NZX 10), Norway (OBX), Poland (WIG20), Portugal (PSI 20), Saudi Arabia (Tadawul), Singapore (STI 30), South Africa (JSE Top 40), Spain (IBEX 35), Sweden (OMX Stockholm 30), Switzerland (SMI Expanded), the United Arab Emirates (ADX and DFM), the United Kingdom (FTSE 350), and the United States (Fortune 500). Information about executives is gathered from publicly available sources, BoardEx, and a Heidrick & Struggles proprietary database.
Explore the data: 2023 appointments
Who is influencing the board agenda—and are board members happy with that?
Where does the board spend its time—and are those the right places?
How are boards addressing the widening risk environment?
Are boards more operationally involved?
How are boards engaging with the workforce?
How are boards thinking about diversity today?
ABOUT THE RESEARCH
Who is influencing the board agenda—and are board members happy with that?
To better understand the relative influence of stakeholders today, we asked directors and CEOs to stipulate which stakeholders have accelerated their influence most in the post-Covid environment. Overall, they report that the CEO and leadership team, the broader workforce, regulators, and consumers and customers have increased their influence more than others. Overall, they report that the CEO and leadership team, the broader workforce, regulators, and consumers and customers have increased their influence more than others; meanwhile, stockholders - mainstream and activist alike - saw their influence increase to a significantly lesser degree.
Global: Stakeholders who have accelerated their influence most in the post-Covid environment (%)
(Somewhat more and significantly more)
The CEO and leadership team
The broader workforce
Regulators
Consumers
Leaders in communities in which we operate
Mainstream stockholders and analysts
Social activists
Activist stockholders
53
47
45
43
23
22
13
13
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,568
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,687
(Somewhat more and significantly more)
Global: Topics on which the board has most increased the amount of time spent... (%)
Technological disruption is top of mind for boards at the moment, as issues such as emerging technologies and cyber risk are being given more attention than they were before the Covid-19 pandemic. On the other hand, boards say they focus to a lesser extent on mainstream and activist shareholder concerns.
Where does the board spend its time—and are those the right places?
71
62
59
57
56
54
42
42
40
33
27
21
13
Emerging technologies, including AI
Cyberrisk
Financial performance and risk
Organizational culture
Geopolitical volatility
Sustainability
Diversity, inclusion, equity, and well-being
Environmental risk
Stakeholder concerns
Executive succession planning
CEO succession planning
Mainstream shareholders
Activist shareholders
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,687
64
54
54
Spending more time talking with management about how they are managing risks
(Somewhat more and significantly more)
Global: Topics on which the board has most increased the amount of time spent... (%)
Governing in a complex environment with an increasing accelerated rate of change
requires new and practical approaches to ensuring expertise and managing risk.
When we asked what steps boards have taken since Covid began to better manage uncertainty and risk, their responses leaned toward an internal focus on risk management, primarily through interactions among the board itself or between the board and management. However, we also see a growing willingness to draw in the contributions of external experts.
How are boards addressing the widening risk environment?
Spending more time understanding and defining the risks we face as a board
Requiring management to spend more time on understanding and defining the risks we face
Internal
Setting up advisory committees on risks we identify
Adding board members with expertise in particular risks we face
Hearing from external experts on various potential areas of risk
External
Engaging with risk advisors separate from those advising management
22
28
35
15
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,569
Note: Numbers may not sum to 100%, because of rounding.
48
Yes, it happens frequently
Yes, it happens occasionally
Yes, it happened once
No
Prefer not to answer
Share that say there has been increased operational involvement overall (%)
Global: Boards’ increasing operational involvement (%)
As the role of the board is expanding, boundaries are also changing, with undetermined consequences for the dynamics between boards and executive teams. We have observed a trend of boards becoming more operationally involved and wanted to understand how widespread of a trend this was. A majority of the respondents to our survey report that board members are indeed more operationally involved: 25% say it happens frequently; 45% occasionally; and 4% that it has happened once. Only a quarter report that they have not crossed that line. Notably, CEOs more often than directors report operational involvement from the board.
Are boards more operationally involved?
Overall
CEOs
Directors
45
45
15
29
25
4
3
4
32
22
25
1
2
1
74
77
67
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,547
46
35
39
There should be a formal advisory board of employees that reports to the management team and the board
The board should know employees’ views based on surveys conducted by management
Board members should meet with small groups of employees from time to time without executives present
Board members should conduct or participate in town halls from time to time to hear employee views
The board should know employees’ views based on surveys conducted by a third party
Global: Ways boards should engage (%)
We increasingly see workers influencing the board agenda globally, and 86% of our respondents (and 93% of directors) see the case for a deeper engagement with the wider workforce. On a global basis, respondents most often preferred to engage with the workforce through the use of surveys, town halls, and direct engagement with small groups of employees without management present. Here, too, there are some differences between how directors and CEOs think boards should seek engagement.
How are boards engaging with the workforce?
Overall
CEOs
Directors
41
37
38
39
32
34
41
29
33
7
9
9
Governing and leading across abiding cultural divisions could be one of the most important contributions business has to offer society. This contribution can take singular forms in different markets. However, the conversation has widened to consider the impact of geopolitical differences—at home and abroad, and the importance of other stakeholders, whose influence we covered earlier.
Our individual market reports examine the nuances of growing diversity among board members.
How are boards thinking about diversity today?
We should have an employee representative on our board
5
7
6
In November 2023, Heidrick & Struggles fielded an online survey that garnered responses from 3,156 respondents. Of those, 2,320 respondents were CEOs and 836 were non-executive directors. Forty-one percent were in Europe; 38% in North America; 10% in Asia Pacific; 4% in both Latin America and the Middle East; and 2% in Africa. Respondents represented companies of all sizes; 23% reported annual revenue of US $1 billion or more. Companies ranged across all industries.
In February 2024, Heidrick & Struggles fielded an online survey that received responses from 2,653 respondents. Of those, 1,927 respondents were CEOs and 726 non-executive directors. Thirty-seven percent were in Europe; 37% in North America; 9% in Asia Pacific; 4% in the Middle East; 3% in Latin America; and 1% in Africa (and 9% N/A). Respondents represented companies of all sizes; 26% reported annual revenue of US $1 billion or more. Companies ranged across all industries.
This analysis is part of Heidrick & Struggles’ long-standing study of trends in board composition in countries around the world. Produced by our global CEO & Board Practice, these reports track and analyze trends in non-executive director appointments to the boards of the largest publicly listed companies in Australia (ASX 200), Belgium (BEL 20), Brazil (B3), Canada (TSX 60), Colombia (COLCAP), Denmark (OMX Copenhagen 25), Finland (OMX Helsinki 25), France (CAC 40), Germany (DAX and MDAX), Hong Kong (Hang Seng), Ireland (ISEQ), India (Nifty Top 200), Italy (FTSE MIB), Japan (TOPIX Core 30), Kenya (NSE Top 40), Mexico (BMV IPC), the Netherlands (AEX), New Zealand (NZX 10), Norway (OBX), Poland (WIG20), Portugal (PSI 20), Saudi Arabia (Tadawul), Singapore (STI 30), South Africa (JSE Top 40), South Korea (KOSPI 50), Spain (IBEX 35), Sweden (OMX Stockholm 30), Switzerland (SMI Expanded), the United Arab Emirates (ADX and DFM), the United Kingdom (FTSE 350), and the United States (Fortune 500). Information about executives is gathered from publicly available sources, BoardEx, and a Heidrick & Struggles proprietary database.
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A majority of US directors are increasing engagement with stakeholders of many kinds. Engagement with the workforce varies widely by region, and from company to company. In the United States, most directors are increasing their commitment to ensure the voice of non-management employees are heard in the boardroom, while stopping short of the more formal voting mechanisms required in some countries.
Increase stakeholder engagement
Directors are accustomed to being hired for their expertise—for being experts. This won’t change, but the scope of expertise required is expanding beyond the capacity of a traditional board. In this environment, “learning to learn” and business judgment have never been more important. Effective chairs set the tone for learning.
Cultivate a learning culture on the board
Still, a growing number of boards are also using mechanisms such as advisory committees, external advisors, and on-demand talent platforms to surround the board with the range of rapidly changing skills needed to create capacity and govern in this expanding environment.
Expand sources of expertise
Polarization has reached severe levels in a growing number of countries, most notably the United States. The new face of diversity includes and goes well beyond traditional definitions and boundaries. The implications for business are far reaching. Make certain that director candidates have the experience, wisdom, empathy, and proven reputation of working across societal and inter-company boundaries.
Govern across boundaries
In this widening risk environment, and with rising investor pressure on directors, effective boards are adopting an ongoing approach to succession planning—for both the CEO and board itself. Reactive recruitment projects are a thing of the past. Still, our research shows concern among many directors that succession is being pushed down the priority stack and not actively addressed.
Increase investment in succession planning
As the scope of board responsibility expands, lean on the corporate secretary for help. Challenge service providers and outside experts to take on more, collaborate with each other, and rethink their business models (standards, pricing, conflicts). Lean on the executive team, and on peer companies, to develop collaborative insights and drive change.
Leverage others
Who is influencing the board agenda—and are board members happy with that?
Where does the board spend its time—and are those the right places?
How are boards addressing the widening risk environment?
Are boards more operationally involved?
How are boards engaging with the workforce?
How are boards thinking about diversity today?
Governing and leading across abiding cultural divisions could be one of the most important contributions business has to offer society. This contribution can take singular forms in different markets. For instance, some of the most substantial changes in the US governance environment are reflected in the changes we see in board diversity, which translates on a focus on gender and ethnicity trends (see 'The United States in context'). However, the conversation has widened to consider the impact of geopolitical differences—at home and abroad, and the importance of other stakeholders, whose influence we covered earlier.
How are boards thinking about diversity today?
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,547
46
35
39
41
37
38
39
32
34
41
29
33
7
9
9
5
7
6
We should have an employee representative on our board
There should be a formal advisory board of employees that reports to the management team and the board
The board should know employees’ views based on surveys conducted by management
Board members should meet with small groups of employees from time to time without executives present
Board members should conduct or participate in town halls from time to time to hear employee views
The board should know employees’ views based on surveys conducted by a third party
Overall
CEOs
Directors
Global: Ways boards should engage (%)
We increasingly see workers influencing the board agenda globally, and 86% of our respondents (and 93% of directors) see the case for a deeper engagement with the wider workforce. On a global basis, respondents most often preferred to engage with the workforce through the use of surveys, town halls, and direct engagement with small groups of employees without management present. Here, too, there are some differences between how directors and CEOs think boards should seek engagement.
How are boards engaging with the workforce?
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,569
Note: Numbers may not sum to 100%, because of rounding.
Share that say there has been increased operational involvement overall (%)
74
77
67
Overall
CEOs
Directors
Yes, it
happens frequently
Yes, it
happens occasionally
Yes, it happened once
No
Prefer not to answer
15
29
25
48
45
45
4
3
4
32
22
25
1
2
1
Global: Boards’ increasing operational involvement (%)
As the role of the board is expanding, boundaries are also changing, with undetermined consequences for the dynamics between boards and executive teams. We have observed a trend of boards becoming more operationally involved and wanted to understand how widespread of a trend this was. A majority of the respondents to our survey report that board members are indeed more operationally involved: 25% say it happens frequently; 45% occasionally; and 4% that it has happened once. Only a quarter report that they have not crossed that line. Notably, CEOs more often than directors report operational involvement from the board.
Are boards more operationally involved?
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,687
15
22
28
35
54
54
64
Engaging with risk advisors separate from those advising management
Setting up advisory committees on risks we identify
Adding board members with expertise in particular risks we face
Hearing from external experts on various potential areas of risk
External
Requiring management to spend more time on understanding and defining the risks we face
Spending more time understanding and defining the risks we face as a board
Spending more time talking with management about how they are managing risks
Internal
(Somewhat more and significantly more)
Global: Topics on which the board has most increased the amount of time spent on... (%)
Governing in a complex environment with an increasing accelerated rate of change requires new and practical approaches to ensuring expertise and managing risk. When we asked what steps boards have taken since Covid began to better manage uncertainty and risk, their responses leaned toward an internal focus on risk management, primarily through interactions among the board itself or between the board and management. However, we also see a growing willingness to draw in the contributions of external experts.
How are boards addressing the widening risk environment?
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,687
71
62
59
57
56
54
42
42
40
33
27
21
13
Emerging technologies, including AI
Cyberrisk
Financial performance and risk
Organizational culture
Geopolitical volatility
Sustainability
Diversity, inclusion, equity, and well-being
Environmental risk
Stakeholder concerns
Executive succession planning
CEO succession planning
Mainstream shareholders
Activist shareholders
(Somewhat more and significantly more)
Global: Topics on which the board has most increased the amount of time spent on... (%)
Technological disruption is top of mind for boards at the moment, as issues such as emerging technologies and cyber risk are being given more attention than they were before the Covid-19 pandemic. On the other hand, boards say they focus to a lesser extent on mainstream and activist shareholder concerns.
Where does the board spend its time—and are those the right places?
Source: Heidrick & Struggles’ survey of CEOs and board members, February 2024, n=2,568
The CEO and leadership team
The broader workforce
Regulators
Consumers
Leaders in communities in which we operate
Mainstream stockholders and analysts
Social activists
Activist stockholders
13
13
22
23
43
45
47
53
(Somewhat more and significantly more)
Global: Stakeholders who have accelerated their influence most in the post-Covid environment (%)
To better understand the relative influence of stakeholders today, we asked directors and CEOs to stipulate which stakeholders have accelerated their influence most in the post-Covid environment. Overall, they report that the CEO and leadership team, the broader workforce, regulators, and consumers and customers have increased their influence more than others. Overall, they report that the CEO and leadership team, the broader workforce, regulators, and consumers and customers have increased their influence more than others; meanwhile, stockholders - mainstream and activist alike - saw their influence increase to a significantly lesser degree.
Who is influencing the board agenda—and are board members happy with that?
Six questions reshaping the boardroom
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2024
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