OnBoard Releases Annual Board Effectiveness Survey; Finds Boards Worldwide Hampered by Ineffective Directors, Poor Preparation, and Lack of Board Diversity

INDIANAPOLIS –  July 19, 2023

Today, OnBoard, the leading board governance software platform, released its third annual Board Effectiveness Survey, highlighting that internal factors are often the biggest obstacles holding boards back from achieving their full potential as they struggle to navigate economic, regulatory, and social challenges. Outside of their organizations, boards worldwide face immense pressures as they contend with the ravages of record-high inflation, ongoing workforce issues, increased regulatory scrutiny, an unstable economy, disruptive shifts from new technologies, and waning trust in board leadership exacerbated by recent high-profile failures.

Respondents indicated that of commonly cited reasons for board underperformance, the biggest contributor was the failure to make the most of board members themselves. Forty-three percent (43%) ranked this as the number one over-arching contributor to board ineffectiveness, followed closely by sub-optimal board processes (38%) and the absence or use of technology (19%).

When respondents were asked to delve deeper to identify their main underlying concerns for identifying the underperformance of board members for the lack of success, there was an overwhelming call for more diversity. The majority identified a lack of diversity and new ideas as the No. 1 driver of an ineffective board environment (95%). Nearly three-fourths (69%) cited poor engagement and collaboration, and ineffective leadership as top concerns.

Overall, two out of every three respondents said at least 10 percent of their board members were ineffective, with many citing lack of director engagement, lack of preparation, and lack of diversity – in terms of cultural representation and professional experience – as the foremost reasons for underperformance.

“This year’s survey reconfirms that board member engagement is key to success for the board as a whole, which directly translates to success for the organizations they serve,” says Martyn Chapman, OnBoard’s Chief Product Officer who has worked with hundreds of boards. In this survey, board member engagement and better preparation by board members ranked as the two highest contributing factors to board effectiveness. “When you consider that one in 10 directors are perceived as ineffective, it is incumbent upon board leadership to re-stimulate the whole boards’ thinking on continually improving effectiveness and where relevant make change,” Chapman says. 

When asked to examine deficiencies within the category of boardroom processes, 84% of respondents cited unclear mission or goals as barriers to effectiveness, as well as lacking governance maturity (79%), and poor meeting planning and preparation (77%).

Technology-oriented factors can also hamper board success. Respondents noted top challenges included a lack of centralized board materials (83%), over-reliance on email (75%), and lack of confidence in digital security (56%).

“Boards across every sector and worldwide face enormous challenges,” says OnBoard Chief Marketing Officer Rob Kunzler. “Facing and solving them requires that every member of the board is an effective and collaborative contributor.”

When asked in what areas boards were effective, more than three-fourths of survey respondents identified board continuity as their biggest strength. More than half (58%) of respondents said their boards were effective at managing environmental, social, and governance (ESG) matters related to sustainability and ethics. More than half also said their boards were effective at recruiting new board members,

This year’s survey results represent input from 208 board professionals serving at all levels across a variety of industries around the globe, including the U.S., Canada, Europe, Asia, Africa, Australia, and New Zealand. By role, chief executive officers, chairs, and board directors made up the largest share of respondents. By sector, nonprofits and the financial services industry had the largest representation.

Read the full survey results: onboardmeetings.com/survey-23

About the 2023 Board Effectiveness Survey

Now in its third year, the OnBoard Board Effectiveness Survey analyzes the trends that contribute to boardroom success or “board effectiveness.” By examining the influence of factors such as technology usage and respondents’ self-described concerns and priorities for their boards and the organizations they serve, our survey analysis intends to demonstrate universal themes and challenges for boards, no matter what sector they serve.

OnBoard surveyed more than 200 board professionals worldwide including executives, directors, and administrators across all sectors of board-led organizations, including financial institutions, universities and colleges, public corporations, nonprofit organizations, and trade groups.