By, Stuart R. Levine

Published In, Forbes

The expectations and demands on board members and boards have never been greater. With the rapidly evolving business environment and industry disruption affecting all companies, directors must work hard to stay current and they must make sure management is up to the task. Recent survey data from the National Association of Corporate Directors (NACD) tells the story of how directors themselves see the need for improvement. This survey, including responses from 520 unique boards conveyed how boards want to better their performance in multiple areas including strategy, technology, cybersecurity, director education and management oversight.

The days of limited board involvement in strategy are over. 71% of directors surveyed believed that their boards should better understand the risks and opportunities that affect performance and drive strategic choices. 67% of directors said their boards needed to improve contribution to strategy development and boost oversight of strategy execution. 56% recognized the need to improve the rigorousness of their decision-making.

Robust board engagement with strategy takes time, and boards must make discussing strategy an important part of every meeting. Even so, the NACD related that over half of the directors surveyed felt that there was not sufficient time for in-depth strategy discussion in their meetings. Well-designed CEO dashboards can help. Regularly refreshed information that is shared in advance allows directors to stay up to date on strategy and track its implementation between meetings. Time in meetings is then more productive as directors arrive prepared for thoughtful engagement.

Implementing strategy often depends on technology. Yet, the NACD found that only about half the directors reported boardroom discussions around the technology investment required to implement strategies. Boards need measures of success for all strategies and especially when dealing with constantly evolving tech-related strategies. Despite this being the case, 38% of survey respondents felt their companies lacked sufficient metrics to assess the progress of tech-related strategy.

Cybersecurity is another concern. Directors certainly feel the challenge of staying up-to-date on cybersecurity issues. Nearly all of the NACD respondents felt challenged in acquiring adequate knowledge to properly oversee cybersecurity. It is concerning, however, that only 37% of NACD respondents felt confident or strongly confident that management was adequately prepared for cyber threats. Barely half the respondents had confidence or strong confidence in management’s ability to handle cyber-risk if an intrusion were to occur. Cyber-security is a particularly important subject for director education, as knowledge of, and responses to, potential cyber-threats are quickly and continuously changing.

A dynamic board culture of continuous learning on all important relevant issues strengthens a director’s ability to oversee and contribute to strategy. A full 45% of those surveyed, however, felt that director education was inadequate and wanted more time dedicated to learning. In fact, the time spent in education, about 21 hours annually, represented less than 10% of the total average time dedicated to a directorship. When emerging tools like blockchain technology and artificial intelligence are poised to reconfigure business, and security issues remain a threat, directors must give themselves every opportunity to strengthen their skills and knowledge. So, it’s not surprising that directors want more attention paid to learning.

Management oversight of strategy involves understanding the data supporting it and “getting under the hood” of assumptions that underpin it. Even though this is a critical fiduciary responsibility, less than half of the NACD’s respondents tested management’s key assumptions supporting strategic decisions. By directors asking hard questions around data and the assumptions around their strategies, forces management to take another look and dive even deeper.

For some boards, upping the game means bringing in new blood. Industry experience and a background that allows for effective technology oversight are particularly desirable traits. Tenure-limiting tools like age limits can make room for new people and 52% of the NACD surveyed companies use them. Fewer than 40% of the companies using age limits, however, found them effective at bringing about the right board composition. A more effective tool is a robust director competency framework that matches skills needed by the company with the skills inventory of board members. This also ensures that directors are being optimally utilized through proper committee assignments. Surprisingly, only 31% of respondents use such a skills-gap analysis, even though 82% consider it effective or very effective in moving towards optimal board composition. An additional recruitment target is diversity of backgrounds. Studies show that diversity in board composition is correlated with value creation for shareholders. This is particularly true when board culture assures that all voices are heard.

Boards are confronting an extraordinarily challenging business environment. There are demands placed on them like never before to improve their effectiveness in decision-making and management oversight. Board composition is key and learning continues the process. Aligning director capabilities with the company’s ever-changing needs, positions a board to do better and do more to fulfill its duty in enhancing long-term value creation.