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What Directors Think 2016

Successfully Navigating Today's Challenges While Maximizing Shareholder Value
April 2016

In response to an ever-changing marketplace, public boards are constantly realigning their priorities to ensure they can fulfill their fiduciary duties while enhancing shareholder value. To that end, Spencer Stuart partnered with NYSE Governance Services on its annual survey, What Directors Think to better gauge board practices and understand what’s on the minds of US public company directors, thus bringing fresh insight to the corporate governance community and better understanding about best practices for boards to follow.

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Key takeaways include:

  • Half (48%) of the directors surveyed agree that economic uncertainty is one of the biggest challenges facing corporate boards in 2016, ahead of market risk (37%) and cyber risk (35%).
  • More than a third of those responding (38%) believe that although they are doing all they can to protect the company’s data, most cybersecurity risk is really out of their hands.
  • Two-thirds (65%) of respondents agree that direct engagement with shareholders can serve to open dialogue in a meaningful way before critical issues come to a head.
  • Nearly two-thirds (62%) of board members surveyed believe the recent wave of hedge-fund activism has reinforced and rewarded short-termism.
  • Close to half (42%) of directors surveyed believe their board needs to focus more on long-term strategic planning.
  • Industry (83%) and financial (78%) expertise/experience are the two most important attributes sought during the selection of a new board member.