How Effective Are Today’s Boards? We Have the Data

Brian Campbell: Welcome to C-Suite Perspectives, a signature series by The Conference Board. I'm Brian Campbell, the leader of the Governance & Sustainability Center and general counsel at The Conference Board. Today, we'll discuss board effectiveness, including findings from our new board effectiveness report in collaboration with PwC. We'll focus on how board performance is perceived across the entire leadership team, how quickly boards adapt to emerging risks, and how boards and management can stay aligned through uncertainty. Joining me today are Arielle Berlin, director of the Governance Insight Center at PwC, and Ariane Marchis-Mouren, senior researcher, corporate governance, at The Conference Board. Welcome, Arielle and Ariane. Arielle Berlin: Thank you. Thanks for having me. Brian Campbell: The sixth edition of PwC and The Conference Board's annual study, "Board Effectiveness: A Survey of the C-Suite," was just published. When you look at board effectiveness today, where do you think boards have made the most progress, and where are they still struggling? Arielle Berlin: Well, thanks, Brian. One of the clearest signs of progress is that executive confidence in boards continues to rise. This year, 41% of executives rated their boards as excellent or good, which is the highest level we've seen since we've been tracking the data. What I think is really interesting is that executives who interact most frequently with the board tend to have the most positive view of its effectiveness. And I think that that suggests that when executives see firsthand how boards operate, they often gain a greater appreciation for the complexity of the board's role and the trade-offs that directors are managing. Where boards continue to struggle is keeping pace with change. Executives cite director bandwidth, overboarding, slow responses to emerging risks and opportunities, and difficulty keeping up with digital transformation as the biggest obstacles to board effectiveness. So I think this year, it's not that boards are ineffective, it's that expectations are rising faster than ever, and boards are under pressure to adapt just as quickly. Ariane Marchis-Mouren: Yeah, I'll echo everything you said, and really say that the progress is real. And you mentioned that the survey shows that executives are concerned about many things, and this is where boards are still under pressure in terms of pace and capacity. And it's not just about whether boards have the right topics on the agenda, it's whether they have the time, information, and operating model to engage early enough and deeply enough. So really, as you said, the story's not that boards are failing or ineffective, it's that the bar keeps rising. Arielle Berlin: Yeah, I totally agree. Brian Campbell: OK. And interestingly, in this year's survey, 41% of executives rated their board as excellent or good, a new high, and a significant increase from the 29% in 2021. Arielle, what do you think is driving this change? Arielle Berlin: So what stands out is that the increase in confidence is not evenly distributed across the C-Suite. We see it strongest among executives who spend the most time with the board. And I think that suggests that greater exposure leads to a more nuanced understanding of what boards actually do. So directors today are overseeing a growing list of issues, as we know, from geopolitical risk to AI, talent, regulatory change. And executives who are part of these discussions see that complexity firsthand. Ariane Marchis-Mouren: Agree, and I'd also chime in saying that the 41% is a new high, which is encouraging, but it also means that many executives still see room for improvement. So the bigger message here is that boards are making progress, but expectations are rising at the same time, and we sort of covered that already. But what may be driving the improvement also is that boards are more visible and more engaged on the issues that matter most. So the next step, and we've hinted at this, the next step is really making sure that engagement is felt beyond the small group of executives who interact with the board most often. Brian Campbell: And one of the more interesting findings, as you note, is that executives who work most closely with boards tend to view them more positively, while those with less exposure rate effectiveness lower. What does that gap tell us about how boards are communicating their value to the broader C-Suite? Ariane Marchis-Mouren: I can start on that one. So I think that gap is one of the most interesting findings in the report. Executives who are closest to the board tend to have a more favorable view probably because they see the board's questions, deliberations, and trade-offs more directly. So they're just closer to the action. They're closer to what's happening. And executives with less exposure may only see the final decision, or the request for more information, without seeing the broader context on how they got to that point. And that kind of reminds me of doing math exercises back in school where you could get points deducted if you just—even if you get the right answer, but if you don't show all the steps. So if you don't show the whole process, you sort of get points off. So I don't really read this as boards being disconnected. I see it more as a visibility issue. And as oversight becomes more cross-functional, boards may need to hear from a broader set of leaders and not just the CEO, CFO, and general counsel. And that can help both sides, so boards could get a richer view of the enterprise, and more executives understand how the board is adding value. Arielle Berlin: That's exactly what I was going to say. The more exposure that additional members of the C-Suite have with the board it's likely that the broader leadership team will then be able to understand how the board contributes to the organization. Brian Campbell: OK. Well, interesting. And we also have a finding that executives continue to point to limited director bandwidth, and that the pace of change is also a major challenge. How do you view overboarding and how it plays into this, and what other factors limit boards' ability to stay ahead? Ariane Marchis-Mouren: Yeah. So overboarding is really a shorthand for a broader capacity question. In the survey, we saw that 47% of executives said directors serving on too many boards prevents their board from being more effective. And that makes sense. Board service is still technically a part-time role, but the demands of the role are no longer part-time in the way that they used to be. Directors are now expected to understand faster-moving risk, engage between meetings, serve on committees, be available during crises, and stay current on more technical topics. And companies are also responding to this. So in the S&P 500, the share of companies with overboarding policies that apply to all directors rose from 68% in 2020 to 86% in 2025. And the standards are also getting stricter. So more companies are limiting directors to three other boards, down from four, which used to be the standard a few years ago. But board count alone does not tell the whole story. Capacity also depends on committee leadership, whether someone is a sitting CEO, the complexity of the companies involved, attendance, preparation, and actual contribution, and if they have other jobs on the side, as well. And that is why overboarding policies are useful, but they need to be paired with judgment. So the question is not just, are directors overboarded? It is, does the board have enough capacity and flexibility to engage when the company needs it most? Arielle Berlin: I think that's right. And just focusing on the idea of effectiveness, I mean, the bigger issue is also that the governance model is being tested right now by the pace of change. Risks are emerging faster than traditional quarterly board cycles were designed to handle. So yes, executives are pointing to overboarding, but I think there's just a stress on the system and on directors in general. Ariane Marchis-Mouren: Absolutely. And I have a bit of an anecdotal story. But in my previous role, there used to be a director that was considered overboarded for quite a few years, and then the pandemic hit. And so they were a CEO of a company in Asia somewhere, but also sitting on the boards of multiple organizations in Europe and the US. And what happened during the pandemic is that they ended up being stuck in Asia to run their company as the CEO. But some of these other companies that they were on the board of moved from four meetings a year to four meetings in a month or four meetings in a week, at some point. So obviously, their attendance dropped, and that really was an interesting conversation to have. And weren't really saying, "Well, because you're a CEO of a company, you can't sit on any other boards." But you really have to take these sort of considerations into when you plan, when you look at director capacity as a whole. Brian Campbell: Well, and that's certainly consistent with the uncertain environment we're operating in, where boards are wrestling with new issues all the time, and engagement is definitely accelerating. We've touched on the view of the board from the C-Suite. Let's shift gears now, and talk about assessments and how the board rates itself. An overwhelming majority of executives believe board assessments could be more impactful. What does a genuinely impactful assessment process look like, versus the checkbox version many boards might still be operating under? Arielle Berlin: Yeah. Thanks for the question. So I think this is really an important point, and it's actually one of the areas where executives and directors are aligned. So as you said, in the C-Suite survey, 90% of executives believe there's room to improve the board assessment process. 90%. And in PwC's annual director survey, directors actually expressed similar concerns. Most directors don't believe that their current assessment process provides a complete picture of board performance, and many view boards as insufficiently invested in the assessment process. So for me, that's a sign that many boards are still treating assessments as a check-the-box exercise rather than a strategic tool for improvement. So I would say, to answer your question, a genuinely impactful assessment does three things. The first is that it drives accountability. The number-one improvement executives wanted in the survey was linking assessment results to board succession planning. They also want more rigorous individual director assessments and visible follow-through after the assessment is complete. So accountability is the first thing. The second thing is the assessment should create space for candid feedback. I think one of the reasons assessment falls short is that boards can be reluctant to talk about difficult issues, particularly when they involve individual director performance, board dynamics, succession planning. And that's why we think that a periodic third-party facilitation can be really valuable. In fact, in that survey I mentioned, the annual corporate director survey, only 22% of directors said their board used an external facilitator for assessments, but 81% of those directors said their assessment process was effective. The ones that used the third-party facilitation saw an increase in satisfaction with their assessment. So I think that's an important point, that an independent facilitator can bring objectivity to the process and just encourage that candor. And I'll say the final thing is that a genuinely impactful assessment leads to action. So an assessment that actually informs board composition, refreshment, leadership succession skills, board culture, that you actually have the takeaways and follow-throughs, I think, will take an assessment from a check-the-box exercise to something meaningful with actionable outcomes Ariane Marchis-Mouren: I agree. Everything you said was spot on, and I guess I'd just add some technical data that we have on board assessment practices. So we know that they're becoming more comprehensive, and evaluations that are focused solely on the full board are increasingly rare. So most companies, larger companies, we looked at the S&P 500, that disclose assessment practices now assess both the full board and its committees, and a growing share also evaluates individual directors. So yeah, this is the most comprehensive model in the S&P 500. That's the full board committee and individual director assessment. And that's really become the leading disclosed approach, which is quite promising when you look at it side by side with the survey data. And it's really these three layers, as you said, that give boards a clearer view of effectiveness. Brian Campbell: Excellent. So the impactful assessment is going to be one that drives accountability and also steers toward change that addresses that accountability, which makes good sense. All right, we're going to take a pause now, a short break. We'll be right back with more of my conversation with Arielle Berlin and Ariane Marchis-Mouren. OK. Welcome back to C-Suite Perspectives. I'm your host, Brian Campbell, leader of the Governance & Sustainability Center and general counsel of The Conference Board. I'm joined by Arielle Berlin of PwC and Ariane Marchis-Mouren of TCB. We'll jump right back into it. 99% of executives believe the board should use AI for oversight, but only 35% of directors are actually using it. That's a striking gap. What's driving the gap between expectations and adoption? Arielle Berlin: So as you said, executives overwhelmingly believe boards should be using AI as part of their oversight, but we know that boards are still in the early stages of experimentation. And I think some of that caution is understandable as directors think about confidentiality, accuracy, governance controls, and just figuring out what the appropriate use is. But executives are increasingly seeing AI as a governance tool, not just a technology topic. So the challenge is really now moving from learning about AI to actually using it in the boardroom. I think this is a classic governance adoption curve that we're seeing. Ariane Marchis-Mouren: Yeah, I agree with everything you said, and I think it's really a comfort and use case gap more than a resistance gap. And the opportunity is really to start with practical, lower-risk uses: summarizing materials, scanning for emerging issues, benchmarking peer practices, or just helping directors prepare for meetings. And AI is there to support director judgment and not replace it. Brian Campbell: OK. Well, a couple follow-ups on this. So, when executives talk about using AI in governance and oversight, what do they actually mean in practice? And then where do you see the most realistic opportunities for boards to use these tools effectively? Arielle Berlin: I think that directors can be using it, as Ariane just said, for benchmarking peer disclosures, analyzing market data, identifying emerging trends, pressure-testing management assumptions, and just closing some of that information asymmetry that we sometimes see between management and the board. Ariane Marchis-Mouren: The most realistic opportunity is not replacing board discussion. It's improving the quality and the speed of preparation so that directors can spend more time on judgment, challenge, and strategic trade-offs. Brian Campbell: OK, so it's that age-old solution that the board brings, where a collaborative conversation with different diverse viewpoints leads to a robust business discussion and can help guide the board, as opposed to just mailing it in or looking at AI to help solve it. Arielle Berlin: 100%. Brian Campbell: All right. And the US political environment ranked as the top area where executives want more board focus. That's an interesting outcome. How do you think boards can stay responsive to political and policy shifts that may affect the business while maintaining a long-term strategic perspective? Arielle Berlin: So I think this finding reflects just how much uncertainty executives are managing today. I think that policy shifts, regulation, geopolitical developments, changing trade relationships, they're all having significant implications for strategy and operations. And look, the board's role is not to predict political outcomes. It's to help management think through different scenarios and challenge assumptions, ask the right questions, and make sure that the company can remain resilient, regardless of how these events unfold in this very unpredictable environment. Ariane Marchis-Mouren: I think that was spot on, and board should not become reactive to every headline. As you said, the board's role is not to predict politics, but to make sure that management is stress-testing strategy against policy uncertainty, and that the company has options available if the environment changes. So that keeps the board responsive without losing the long-term lens. Brian Campbell: So the political winds may shift, but the board still has to have that North Star or one-, three-, five-, 10-year perspective on strategy. OK. Well, interesting. All right. And so our survey was conducted late last year. Six months into this year, how do you think things have changed, and what areas should boards focus on for the next six months? Arielle Berlin: I think that these themes in the report have just intensified since we got the data. I'll let Ariane chime in, but I mean, one of the first things I see is AI governance. Boards need to move beyond learning about AI and start really determining how they're going to oversee it across its organization. And that means understanding where AI's creating value, what the risks are, what the governance structures are, and make sure that they're in place, and how management is monitoring responsible use. And that also means considering how boards can use AI to strengthen oversight and decision-making. And the only other—I mean, there are many, but another one I'll just say is just continuing to navigate the uncertainty we just talked about, in terms of the US political environment and thinking through different scenarios and building resilience, regardless of how policy or geopolitical developments unfold. Ariane Marchis-Mouren: Yeah. Absolutely, and I'd say the key three areas that I think, the focus should be on is capacity, agility, and follow-through, which is everything that we've just mentioned. So for me, the strongest boards over the next six months will be the ones that don't simply add more topics to the agenda, but they sharpen how they prioritize, how they engage with management, and how they translate into action. So the next phase of board effectiveness will be less about whether boards have the right governance processes on paper and more about whether these processes help boards make better decisions. And if I had to sum up the report in one sentence, I'd say, board effectiveness is improving, but expectations are rising even faster. Arielle Berlin: Yeah, and I would just also add, I mean, I think the board's role is to help management see around corners. And a really strong takeaway is that board effectiveness is increasingly about adaptability, especially in this environment. Brian Campbell: Fantastic. Well, thank you very much, Arielle and Ariane, for being with us and for such a robust conversation today. Arielle Berlin: Thank you. Thank you for having me. Ariane Marchis-Mouren: Thank you. Brian Campbell: All right. And thanks to all of you for listening to C-Suite Perspectives. I'm Brian Campbell, and this series has been brought to you by The Conference Board.