TOWARDS DYNAMIC GOVERNANCE 2014
European Corporate Governance Report
BOARD EFFECTIVENESS HIGHLIGHTS
Our respondents demonstrated overwhelming support for the importance of compliance with corporate governance codes and, encouragingly, the majority felt that their performance was satisfactory in this respect. However, across the key features of board eff ectiveness we found signifi cant performance gaps and diff ering viewpoints from the key offi cers of the board.
Deep business knowledge
Three-quarters of respondents felt they have the right balance of executive/non-executive representation to support the business.
Over 80% felt their committees were empowered to supply the right degree of scrutiny and review.
The majority of respondents (83%) felt induction training for new directors was important, but only 68% were satisfi ed with the induction processes of their board.
Diversity of thought
Having the right balance of skills, knowledge and experience to constructively challenge senior management is seen by 97% as important but only 82% rated their own board performance as satisfactory.
Engaged leadership
A leadership style that encourages excellent team dynamics is seen as important to 93% of directors, yet only three-quarters (76%) felt performance was satisfactory in this area.
CEO and executive directors saw a signifi cant gap between importance (4.58 / 4.69 out of 5) and performance (3.92 / 3.78), when describing the eff ectiveness of chairman leadership style.
Strategic alignment
Clear vision and strategy understood by all are two elements identifi ed as important by 93% and 97% of directors respectively.
The same directors rate satisfaction with performance in these areas at 81% and 83% respectively.
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