From the diversity of the board to oversight of new ESG risks, directors are coming under increasing pressure to rethink governance and decision making processes. Are Caribbean organisations living up to stakeholder expectations? PwC in the Caribbean’s Corporate Governance Survey 2022: Picking up the pace gauged the views of 193 directors from private and public sector organisations across the region to find out.
Snapshot
Boards are connecting ESG to strategy but may not fully understand the risks
Approximately 6 in 10 directors reported that ESG issues are linked to the company’s strategy and are a part of the board’s enterprise risk management discussions. However, more than half feel that there’s still not enough board attention placed on ESG issues and just 11% feel that their board understands material ESG risks very well.
%
would replace two or more fellow directors
Directors want boards refreshed
More than half of the directors interviewed are of the view that at least 1 board member needs to be replaced, and nearly 40% would replace two or more.
Diversity is welcomed but not sufficiently embraced
All of the directors we surveyed agree that diversity brings unique perspectives to the boardroom and on average 9 in 10 agree that it enhances board and company performance, improves strategy and risk oversight and strengthens relationships with investors. Yet 43% reported that their boards have not taken any action to strengthen diversity over the past two years.
%
reported that their board had an assessment done in the last year
Directors say there is room for improvement on board assessments
Less than half of the directors surveyed reported having done a board assessment in the last 12 months, of which more than two-thirds were self assessments. When asked about self assessments, less than half believe the process is effective.
Executive management and compensation needs a second look
With respect to executive pay, two thirds of directors surveyed feel that performance targets are too easy to achieve and only slightly less believe that compensation committees are too willing to approve overly generous packages/incentives.
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