Corporate boards are improving the ways they deal with crisis management and ESG issues but less so on diversity, according to PwC's Annual Corporate Directors Survey released Monday.
The survey conducted from February to March 2020 included 693 directors in more than a dozen industries, 75% of which have annual revenues of more than $1 billion. Among respondents, 76% were men.
On diversity, 84% of the board directors "believe companies should be doing more to promote gender and racial diversity in the workplace," but only 39% support concrete measures such as including diversity and inclusion goals in executive compensation plans.
Even fewer, 34%, considered a diverse boardroom important, and only 15% of male directors strongly agree that board diversity enhances company performance.
A lack of qualified candidates as a reason for low board diversity was given by 47% of male directors and 25% of female directors.
Nearly half of directors surveyed, 49%, said that at least one fellow board member should be replaced.
"Corporate directors are still figuring out how to take the next meaningful step on diversity within the organization. Boards can start by making sure that they are receiving diversity data and including diversity in executive compensation plans," said Paula Loop, PwC U.S. governance insights leader, in the release. "It's also important for directors to lead by example and make diversity a priority within the boardroom itself."
The PWC survey did find that the COVID-19 pandemic is changing boardroom priorities when it comes to ESG issues. The percentage of directors saying that disclosing a company's efforts on ESG-related issues should be a management priority rose to 41% from 30% in 2019. The percentage of directors saying that ESG issues should regularly be on the agenda rose to 45% from 34% last year.
Among the directors, 67% believe issues like climate change should be taken into account when developing company strategy, and 50% said their boards fully understand ESG issues impacting the company.
On crisis management, 28% of directors said their companies had not taken any steps to address an economic downturn in the 12 months prior to the recession, while 98% said their management teams did a good or excellent job dealing with interruptions in internal operations because of COVID-19.