Board Members Aiming to Balance a Long-Term Approach with the Need to Meet Short-Term Investor Expectations, According to PwC’s 2015 Annual Corporate Directors Survey

New York, October 6, 2015 – PwC today released its 2015 Annual Corporate Directors Survey, a comprehensive report based on responses from 783 public company directors. The new report delivers compelling insights into the factors that influence boardroom decisions.

The survey points to the pressure board members face balancing long-term strategic planning and investment with the need to meet short-term investor expectations. Despite the growing influence of activist investors, board members continue to focus on initiatives aimed at enhancing long-term shareholder value. Fifty-eight percent say their strategy time horizon is five years or greater, compared to just 48 percent in 2011. In fact, only 42 percent of directors now say they use a one-to-three year time horizon in evaluating strategy, compared to 52 percent who said so four years ago.

“The growing dichotomy between long-term and short-term thinking is having a notable impact on today’s corporate boardrooms,” said Paula Loop, Leader of PwC’s Center for Board Governance. “Board members are feeling the pressure to focus on near-term results and are opening up direct dialogue with investors. They’re also turning a more critical eye inward in an effort to improve the quality and flow of information from management, gain a better understanding of IT and prepare for potential shareholder activism.”

A sampling of key findings from the report includes:

  • Directors are less satisfied with their peers’ performance. Nearly 40 percent of directors now say someone on their board should be replaced – a jump from 31 percent only three years ago. Directors continue to cite diminished performance due to aging, unpreparedness for meetings and lack of expertise as the top reasons for their dissatisfaction with peer performance. Less tenured directors are more critical of their peers’ performance than directors with ten or more years on the board.
  • Directors are taking action in anticipation of shareholder activism. Nearly seven-in-ten say their board regularly communicated with the company’s largest investors over the past year. A number of boards are also regularly monitoring their shareholder base, with 56 percent using a stock-monitoring service to provide them with regular updates on changes to the company’s ownership.
  • There was an increase in the percentage of directors who say their board has interacted with activists. About one-third of directors now say they have interacted with activists during the last year and held extensive board discussions about activism compared to 29 percent last year; 17 percent have extensively discussed the topic this year even though they have had no activist interaction – up from 14 percent in 2014.
  • There are significant differences in male and female director views on board diversity’s impact. Female directors are twice as likely to “very much” believe diversity leads to enhanced board effectiveness. Similarly, 74% of female directors “very much” agree that board diversity leads to enhanced company performance, compared to only 31% of males.
  • Director engagement with IT issues has increased. Eighty-three percent of directors say they are at least moderately engaged in understanding the status of major IT implementations, an increase of six percentage points from last year. Similarly, 83 percent of directors describe themselves as at least moderately engaged with overseeing the risk of cyber-attacks. Annual IT budgets and the level of spend on cybersecurity are also areas that are seeing more director engagement.
  • Directors rate IT strategy expertise as a bigger priority than having a director with a cyber-risk background. Given the climate around cyber-breaches, it’s not surprising that 89 percent of directors find board expertise in this area to be at least “somewhat” important. However, it is surprising that directors prioritize IT strategy expertise more than cyber-risk expertise.
  • Management could improve their communications. Fifty-five percent of directors at least somewhat wish their dialogue with management was less formal and more spontaneous. And nearly half of directors at least “somewhat” wish these discussions were less scripted or controlled.

About PwC's Center for Board Governance

PwC’s Center for Board Governance is a group within PwC whose mission is to help directors effectively meet the challenges of their critical roles. This is done by sharing governance leading practices, publishing thought leadership and offering forums on current issues. For more information, please visit

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