Beyond the Board Room: How Corporate Directors Gain Insight
It’s no secret that serving as a corporate director today is more challenging than ever before. Between the escalating pace of change, the increasingly public profile of boards, and the growing set of existential risks that companies face, one could argue that modern directors have more on their plates now than at any other time in history. Corporate governance researchers and practitioners have written extensively in recent years about the necessity for changes in the boardroom; they’ve pushed for boards to improve their approaches to leadership diversity, technology usage and education, cyber risk oversight, corporate culture oversight, and overall proactivity. As directorship becomes more demanding, the traditional method of information transfer – where management prepares a paper board book (a.k.a. “meeting materials” or “board papers”), directors read the book, and the board meets to discuss the contents – has become insufficient. Modern governance requires change.
As the role of the board continues to evolve to meet new demands, so too must the way directors acquire and assimilate new information. For a long time, the focus on updating board practices has been directed at helping management find more efficient methods of communicating information to directors in preparation for meetings. The key has been to ensure directors are receiving accurate, timely reports from management with digestible information that they can use to make strong decisions. But the focus of much of the existing literature on this subject is on management – what reports the management team should provide to the board, how the reports should be structured, and the means with which the reports should be delivered to directors.
Diligent Institute sought to ask a different question: What are directors doing to gain insight and prepare for board meetings?
Diligent Institute also designed this study to understand more about what kinds of information directors seek as they prepare for board meetings, how they feel about what they receive from their management teams, and where else they turn for insights and education. The goal of this work is to help elucidate directors’ meeting preparation practices for those who work with boards on a regular basis – including CEOs, General Counsels, Corporate Secretaries, and other governance professionals. This research also seeks to reveal opportunities for these actors to re-examine their board information and communication models.
Diligent Institute surveyed directors from around the world to learn how they currently prepare for board meetings. The data on how directors prepare for meetings is reviewed through two different lenses:
- The percentage of directors who engaged in each activity.
- The percentage of time directors spent on each activity, on average.
Download the full report to learn what we found.