Corporate Directors Survey 2024 ​

Future-ready boards: Navigating tomorrow’s disruptions today

 Corporate Directors Survey 2024 ​
  • Report
  • 15 minute read
  • January 2025

PwC’s 27th Annual Global CEO Survey reveals that 63% of Asia Pacific CEOs believe their business will fail in 10 years without intervention. Companies must reinvent to stay relevant, and boards must keep pace with these changes.

Our survey of corporate directors in Malaysia highlights key areas that shape a board’s ability to navigate disruptions. At first glance, the survey findings seem to indicate a promising shift towards progressive boards. Most directors are eager to leverage the benefits of board diversity, environmental, social and governance (ESG) and generative AI (GenAI) - demonstrating that despite a strong focus on governance, directors also recognise the importance of emerging issues. ​

However, further investigation of the results reveals a disconcerting trend. Consider the following paradoxes: ​

  • 53% agree that board diversity brings unique perspectives to the boardroom; but only 25% believe it translates into better board or company performance​

  • 100% of directors have discussed at least one sustainability topic in board meetings over the past 12 months; but less than one-fifth of directors understand how their company's climate commitments influence capital allocation decisions​

  • 75% recognise the importance of GenAI and cyber security; but only a few have gained sufficient skills to oversee their companies’ strategies in these areas​

Are boards merely skirting around these issues without fully grasping how to leverage their value?​

In many instances, companies need to operate in a highly regulated market. However, a ‘check-the-box’ compliance approach by boards may result in missed opportunities, significant risk exposures and, in the worst-case scenario, a substantial decline in value. This not only dilutes the company’s relevance to stakeholders but can also create a vicious cycle of unease for shareholders.​

We hope that the findings from our survey inspires boards to be proactive, not just compliant, in building a better future for their company.​

1. Board effectiveness​

While the board’s role in governance is well understood, the actual performance and results of individual boards can vary greatly in areas such as oversight, strategic guidance and maximising shareholder value. This variability largely depends on the overall effectiveness of the board. ​

An effective board goes beyond providing mandatory oversight and meeting regulatory requirements. It can also initiate and drive business reinvention strategies, ensuring the company’s viability in a rapidly changing world.​

Board members generally express confidence in handling routine corporate governance duties associated with serving on a board: 96% of directors express confidence in their board's ability to establish governance structures and control. 

However, this confidence level wanes when it comes to conducting self-assessments and addressing the resulting outcomes, with only 69% of boards feeling confident in their ability to assess their own performance. ​

Q: How confident are you in your board’s ability to effectively... (very confident and somewhat confident) ​

Board members are confident in their ability to navigate foundational responsibilities​
%
Establish corporate governance structure and controls​
%
Navigate policy and regulatory changes​
%
Disclose board governance issues​
But less confident in assessing performance and removing underperforming directors ​
%
Assess CEO performance​
%
Assess its own performance​
%
Remove underperforming directors​

Source: PwC Malaysia’s Corporate Directors Survey 2024​

“Board members tend to be forgiving in their assessments of fellow board members in formal evaluations, unless there is a serious problem. Evaluating how we can do better as a board could be a better metric to look at to assess board effectiveness, for example, looking at improving how boards are run.”

RespondentPwC Malaysia's Corporate Directors Survey 2024

Board actions

Effective oversight requires conducting transparent and regular evaluations to identify underperformance, offer recommendations for skill development, and plan for succession. If it is left to fester, underperformance may undermine the moral authority of the chair and deter qualified candidates from joining the board. 

Don’t let assessment efforts go to waste. Since substantial effort and resources are typically invested in board assessments, the results should be transparently discussed, with clear follow-up actions and timelines established to hold directors accountable. ​

A well-equipped board is an effective board. Collectively each member of the board needs to have the skills, knowledge and industry acumen to bring the right expertise and wisdom to the table. ​

2. Board composition and diversity

The corporate governance landscape is evolving at a relentless pace, making the composition of a board crucial for effective oversight. The aim is to cultivate diversity of thought within the boardroom. Beyond gender, having members with a balanced mix of skills, experiences, backgrounds and tenures can enhance decision-making and ultimately lead to improved company profits. ​

Directors believe that technical expertise remains the most important factor in achieving diversity of thought in the boardroom, followed by demographic factors​

Q: How important are the following factors in achieving diversity of thought in the boardroom?​

 

%
Technical expertise
%
Gender
%
Race/ethnicity​
%
Board tenure

Source: PwC Malaysia’s Corporate Directors Survey 2024​

More than half (53%) of directors surveyed agree that efforts to increase board diversity have resulted in unique perspectives, and 44% appreciate its effects on board culture. However, they’re less certain whether this translates to performance outcomes, with only a quarter (25%) of directors saying that they’ve seen a boost in board and company performance. ​

Directors mostly value diversity on their board for its positive impact on board perspectives and culture​

Q: Efforts to increase board diversity have resulted in...​

 

%
Bringing unique perspectives to the boardroom​
%
Improving board culture​
%
Enhancing board/company performance​
%
No significant impact​
%
Adding unqualified/unneeded candidates​
%
Negative impacts​

Source: PwC Malaysia’s Corporate Directors Survey 2024​

“Approaching board appointments from the perspective of talent pool expansion makes it easier to measure performance, because they’re hiring based on skillset and their contributions. It’s important to be clear on the goals your organisation wants to achieve, and ask yourself who is the best talent to help you do this.”

RespondentPwC Malaysia's Corporate Directors Survey 2024

Board actions

Map your board composition needs. Clearly define the necessary capabilities required for your board, including the need for diversity beyond technical skills. Regularly align the board's composition with the organisation's strategy and regulatory changes. Note that fulfilling a technical need doesn't preclude characteristics like gender, and vice versa.​

Bridge the diversity-value perception gap. Balance regulatory requirements for board composition with the value proposition of board diversity. Measure and demonstrate the value that diversity brings to the organisation by assessing the capabilities and contributions of diverse board members.​

3. Sustainability and climate change​

Sustainability has become a regular topic in board meetings, with all survey respondents having discussed it at least once in the past 12 months. Despite this, most directors perceive climate change as having a neutral impact on company value, with only 21% viewing it as an opportunity for value creation.​

A key question remains: how does sustainability connect to overall business strategy and investment? Only 14% of surveyed board directors understand how their climate commitments influence capital allocation decisions, and just 27% believe that climate change consideration is embedded into their value creation strategy.​

One of the challenges directors face in aligning sustainability with business strategy is the lack of control and visibility over their companies' sustainability plans and data. Only a quarter or less of our respondents feel that they have sufficient control over the accuracy of data in the company’s sustainability report or visibility over its net zero plan.​

Directors struggle with visibility and control over net zero plans and accuracy of sustainability reports

Q: To what extent do you agree with the following statements regarding your company’s climate strategy?

22%

feel they have sufficient visibility over their company’s net zero plan

25%

feel they have sufficient control to manage the quality and accuracy of data in sustainability report​​s

Source: PwC Malaysia’s Corporate Directors Survey 2024​

“On its own, sustainability's place on the board's agenda is often a reflection of its members' personal beliefs. However, when sustainability impacts market access and the bottom line, boards have no choice but to make it a priority..”

RespondentPwC Malaysia's Corporate Directors Survey 2024

Board actions

Effective sustainability initiatives can lead to immediate benefits, such as cost savings and revenue protection, in addition to long-term success. Given that board members typically serve longer terms than CEOs, they provide continuity and help maintain at least a medium-term perspective on the company’s direction.​​

  • Establish a governance framework incorporating ESG considerations at board, C-suite and mid-management levels. Define terms of reference and set KPIs through the Board Nomination and Remuneration Committee. ​
  • Review material ESG risks and opportunities to align with national priorities and stakeholder interests. Evaluate initiatives for impact and relevance, identifying gaps or redundancies. Assess the portfolio mix of impacts of climate actions, e.g., cost savings, risk reduction, revenue growth and brand enhancement.​
  • Define data and reporting requirements to meet stakeholder expectations, overseen by the Audit Committee. This includes having a governance framework to ensure accurate and timely availability of data. Implement Three Lines of Defence and conduct independent reviews for data integrity.

4. Generative AI and cyber security​

PwC’s 27th Annual Global CEO Survey found that 73% of CEOs in Malaysia are most concerned about cyber security risks when it comes to GenAI. Corporate directors reflected similar sentiments in our survey. 75% of directors recognise the need to invest in GenAI technologies within the next 3-5 years and have implemented at least one cyber security measure in the past 12 months. However, only 4% of directors express confidence in their board’s capabilities to oversee the company’s GenAI and cyber security strategies.​​

Although directors recognise the need to invest in GenAI and manage cyber security risks, they lack confidence in their board’s capabilities to oversee them​

75%

Agree that investing in GenAI is important and have also invested in cyber security in the past 12 months​

Only 4%

Have gained sufficient skills to oversee their companies’ GenAI and cyber security strategies​​​

Source: PwC Malaysia’s Corporate Directors Survey 2024​

“The topic is new, complicated and constantly evolving. What boards can do is discuss with management on guardrails and what their plans are. But unless there are one or two board members who know how to steer the conversation on digital and AI, it will be hard to meaningfully guide management.”

RespondentPwC Malaysia's Corporate Directors Survey 2024

Board actions

Boards face the challenge of keeping up with the pace of change by having to familiarise themselves with the fundamentals of GenAI, exploring emerging real-world use cases and understanding its associated risks. ​

  • Establish a strong digital governance framework. Develop a comprehensive governance model, with clear accountability and oversight. Boards should ensure that management, in its quest to drive AI adoption, also puts in place responsible AI frameworks.​

  • Adopt a digital mindset. While it may be challenging for boards to keep up with the pace of change, they should, at the minimum, develop a strong digital mindset to relate to these changes.​

  • People matter, now more than ever. Encourage management to assess AI's impact on their workforce. While some jobs may be replaced, many will evolve, requiring employees to adapt.​

Conclusion

Across the four areas we examined, it's encouraging to see that boards are increasingly stepping up to face new challenges. Forward-thinking boards are transforming their governance approaches to be more outward-focused and adaptable to disruptions.​​

However, for businesses to remain viable into the future, boards must evolve at an unprecedented pace. Despite mounting pressure from stakeholders to address emerging challenges, many boardrooms are not adequately addressing critical issues that are impacting their organisations. There is much to do in this area and boards need to act today to prepare for the uncertainties of tomorrow as we navigate an ever-evolving business landscape. ​​

We hope these insights will inspire boards to proactively assess the effectiveness and relevance of their current practices as they build their future-ready board. ​

About the survey

PwC Malaysia’s Corporate Directors Survey analyses the views of company directors from across Malaysia on a variety of corporate governance issues. We collected responses from 90 directors across diverse industries through surveys and interviews between 6 September to 18 December 2024. ​

The respondents represent a cross-section of companies from different industries, 72% of which have a market capitalisation of more than RM1 billion. 52% of the respondents were men and 45% were women. ​

We express our sincere gratitude to all survey participants who have contributed valuable insights to our study, and to the Minority Shareholders Watch Group for supporting in the survey distribution.​​

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Soo Hoo Khoon Yean

Soo Hoo Khoon Yean

Managing Partner, PwC Malaysia

Tel: +60 (3) 2173 0762

Nurul A'in Abdul Latif

Nurul A'in Abdul Latif

Executive Chair, PwC Malaysia

Tel: +60 (3) 2173 0935

Elaine Ng

Elaine Ng

Partner, Risk Services and Markets Leader, PwC Malaysia

Tel: +60 (12) 334 6243

Sundara Raj

Sundara Raj

Chief Digital Officer, PwC Malaysia

Tel: +60 (3) 2173 1318

Andrew Chan

Andrew Chan

Partner, Asia Pacific Strategy & Transformation Leader, Sustainability & Climate Change, PwC Malaysia

Tel: +60 (3) 2173 0348

Dominic Chegne

Dominic Chegne

Partner, Risk Services, PwC Malaysia

Tel: +60 12 332 2300

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