The once clear-cut boundary between non-executive directors and senior management is becoming increasingly blurred, with a significant number of business leaders indicating a lack of full trust in their executive teams to effectively manage operations.
According to an annual report by Heidrick & Struggles, the global headhunting firm, more than a fifth of directors surveyed, including those from FTSE 350 companies, expressed concerns about their executive teams’ ability to “get things done.”
The report, which surveyed over 3,000 CEOs and directors worldwide, highlights a growing trend of non-executive board members becoming more operationally involved. This shift is particularly pronounced in the UK, where nearly three-quarters of respondents acknowledged increased board involvement in day-to-day operations, with 22% reporting frequent involvement and 49% noting occasional participation.
This increased engagement is attributed to several factors, including a desire for board members to have a deeper understanding of company operations (cited by 43% of UK respondents) and the need to support CEOs who are overwhelmed by the demands of their role (21%). However, the most concerning finding is that 22% of respondents believe this involvement stems from a lack of trust in the executive team’s ability to manage operations effectively.
Kit Bingham, partner and head of UK board practice at Heidrick & Struggles, noted that the pressures on boards have intensified, driven by investor expectations, regulatory demands, and the complexities of modern business challenges such as artificial intelligence, cybersecurity, and environmental, social, and governance (ESG) issues. “The challenges and expectations on boards are ultimately greater than ever,” Bingham said.
Alice Breeden, a regional practice managing partner at Heidrick & Struggles, pointed out the resulting tensions within the boardroom. “Boards are potentially spending more time in operations than they should, just to reassure themselves that they know what’s going on and that the executives have got it,” she explained.
The degree of operational involvement by boards varies across countries and sectors, with the financial services industry reporting the least involvement globally. However, the trend is reshaping the role of boards across the business landscape.
Mark Cutifani, former CEO of Anglo American and current chairman of Vale Base Metals, who contributed to the report, observed that the role of the board is “changing quite significantly, far more significantly than we probably appreciate.” He emphasised that boards must take a more active role in various aspects of the business, as the complexities of today’s corporate environment demand more than what a CEO alone can manage. “You’ll need some of it from the board,” Cutifani concluded.
This shift in board dynamics underscores the evolving challenges faced by businesses today and the critical need for a collaborative approach to leadership and governance.
