Directors increasingly involved in operations as trust in executive teams wanes

According to an annual report by Heidrick & Struggles, over a fifth of directors, including those from FTSE 350 companies, expressed concerns about their executive teams' abilities to manage operations effectively. This reflects a trend towards increased operational involvement among non-executive directors, particularly in the UK, where three-quarters of respondents acknowledged that boards are becoming more involved in day-to-day activities. The shifting landscape signals an emerging complexity in the traditional roles of boards and management.

Kit Bingham, partner and head of UK board practice at Heidrick & Struggles, noted the pressures on boards have intensified with rising investor expectations, regulatory demands, and business challenges such as artificial intelligence and cybersecurity. He stated, 'The challenges and expectations on boards are ultimately greater than ever,' highlighting the increasing burden facing directors as they navigate these complexities while trying to maintain oversight and support their management teams.

Alice Breeden, a regional practice managing partner at Heidrick & Struggles, emphasized the resulting tensions within boardrooms, stating, 'Boards are potentially spending more time in operational involvement, which reflects both a response to complex demands and a potential lack of trust in executives. Non-executive directors are finding themselves needing to engage more deeply in operations to support and validate the decisions of their executive teams.'

The report surveyed over 3,000 CEOs and directors and indicated a substantial operational involvement from non-executive board members, attributed primarily to a desire for deeper understanding and need for support. With 22% of respondents citing a lack of trust in their executive teams, this points to an evolving dynamic that has significant implications for corporate governance and the relationships between boards and their management.

Read at Business Matters