Management succession planning and ESG are among the most critical issues that boards of directors worry about, new data finds. Boardspan, the leading provider of digital governance solutions for boards across all sectors, found in its 2022 Board Performance Benchmarks that both topics present the most significant performance challenge this year, despite improvement in both areas over the last 12 months.

“CEO Succession Planning is a top priority for boards, now more than ever, and boards are paying more attention to their core responsibilities around leadership development and succession,” said Abby Adlerman, CEO of Boardspan. But boards still see room to improve. “Whether focusing on a CEO’s performance and growth or helping plan for eventual succession, the board’s relationship with the top executive needs to be constructive and candid.”

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ESG is seen as a developing practice that still lacks clear definition and structure, hence the challenge. “We’re paying attention to both our quantitative and qualitative data as boards start leaning into ESG,” Adlerman says. “Most board members see ESG as an evolving topic and one that will continue to be influenced by dynamic reporting requirements, investor sentiment and public perceptions.”

The 2022 numbers show that boards continue to perform very well with respect to high ethical standards, fiduciary responsibilities and communications with management teams. Improvement is also seen in the board’s own succession planning and their recognizing the importance of leadership reviews. “Boards are embracing more comprehensive 360 reviews for their CEOs in this challenging environment. We expect that trend to continue and become a staple of good governance,” observed Adlerman.

Source: Boardspan