Most US executives want to remove at least one director, PwC survey says

The vast majority of senior U.S. executives want at least one member of their company's board to be replaced, and a fast-growing number feel that directors are muscling in on management, new research from PwC and The Conference Board shows.

WHY IT'S IMPORTANT

Investor scrutiny has intensified in recent years, while corporate officers and their boards of directors are placing ever-tougher demands on each other to help steer through political volatility, regulatory uncertainty and shifting consumer behaviour.


Now that directors are being asked to bring more specific skills, managers increasingly feel they are overstepping, the study showed.

Boards are meant to preserve value for a company's shareholders by supervising executives and dismissing those who fail to perform. Many members have seats at several companies.

BY THE NUMBERS

Among 520 top managers at U.S. public companies surveyed between September and November 2024, fully 93% said they wanted at least one director to be replaced, an all-time high for the five years this survey has been conducted, while 78% said two or more should be replaced.

Respondents were most worried about directors' performance being diminished by their advanced age, with 56% citing that, while 47% worried members served on too many boards. Only 32% believe their boards have the right skills and expertise.

Thirty-two percent of managers reported directors intervened in day-to-day decisions - including trying to influence mid-level hiring or pushing for specific suppliers - double the 16% who reported this the previous year.

Those who said their boards are doing a good or excellent job rose to 35% from 30% the previous year.

KEY QUOTES

"In today's fast-moving environment, being good enough isn't enough," said Ray Garcia, PwC Governance Insights Center leader.

"As boards add directors with deep subject matter expertise in areas like cybersecurity, climate, human capital and digital transformation, those individuals may feel both equipped and compelled to engage more directly," the study said.