Boards - A Crisis of Accountability

In the U.S., public company governance is the best governance there is, with good reason. Stakeholders expectations are high, and the caliber and conscientiousness of directors of U.S. public companies meets those expectations. So we might be forgiven for collectively raising an eyebrow as PWC’s 2025 Corporate Directors survey (download here) “reveals a crisis of accountability that underscores a profound and pressing need for greater accountability within boards.” The three top takeaways from the survey of over 600 public company directors — highlighted below — reflects that even the best boards can likely do better.

Director Performance is an Issue

Underperformance among individual directors is often recognized, and simply not addressed. If it feels like there is an elephant in the room, there is. Individual performance assessments can improve board effectiveness. Spencer Stuart’s 2024 Board Index reports that 50-60% of public company boards now conduct individual director assessments (up from only 30% ten years ago). The PWC report notes that “directors increasingly recognize that their effectiveness — and, by extension, their ability to provide effective oversight — requires confronting underperformance head-on.”

Board Composition Needs Attention

Diversity across all relevant measures including experience, skillset, mindset, approach, and qualities of character is a business imperative, quite separate from any political agenda. The same old people, operating in the same old way, and particularly as a powerful “in-group,” are not likely to find new approaches to solving problems. Diversity of boards is more important as the pace of challenge accelerates. Directors must “proactively refresh board membership to help align with strategic goals, stakeholder expectations and rapidly evolving market dynamics.”

Board Self-Assessments Reveal Issues

Board self-assessments happen almost 100% of the time, with 75% including committee assessments. The results are often summarized and discussed privately, but increasingly, boards are demanding more, including greater transparency concerning issues they are addressing, often with assistance from external facilitators. Identifying the top 1-3 issues the board will address, and sharing this with stakeholders, creates a culture of continuous improvement. It is more difficult to hold oneself to the highest standards of conscientious commitment to improvement when concerns are kept from stakeholders who would be the biggest advocates for change. If this message resonates with you, there may be more you can do.

Accountability for Conscientious Boards

• Share the PWC report with your board. Discuss findings that are relevant.

• Commit to assessments of the full board, all committees, and individual directors.

• Create the possibility of renewal by agreeing to diversify board composition in ways that will make a difference. Consider the merits of reasonable limits on terms of service. Of note, the 2024 Spencer Stuart U.S. Board Index report found that only about 6% of S&P boards have formal terms limits.

Recommended Reading

• The Body Keeps the Score: Brain, Mind and Body in the Healing of Trauma, by Bessel Van der Kolk, MD (2015) A powerful reflection on how the body stores experiences that will have you asking where you feel, not just what you feel.

• Thinking, Fast and Slow, by Daniel Kahneman (2015) Not thinking costs us big when our minds jump to conclusions (bias is a feature, not a bug) when real thinking is needed.

• The Courage To Be Disliked: The Japanese Phenomon that Shows You How to Change Your Life and Achieve Real Happiness, by Ichiro Kishimi and Fumitake Koga (2018) We are each in control of ourselves independent of the past and the expectations of others.

For You: Re-Mastering the Perspective Shift

Recently I had a good long stretch of time where exercising and eating healthy foods seemed effortless — what do they call that — oh yes, summer. Well, now it’s fall, and I want to bake an apple pie and hibernate. If you’re also a mammal, your health and fitness goals haven’t changed, but the ease of motivation has. The good news is that we can trick ourselves to getting back on track. Here are three mind games (the good kind):

Instead of Judging, Make Friends

If you were treating yourself like you would treat your best friend, what would you do more of, and what would you do less of? One thing you would do less of would be judging and admonishing. One thing you would do more of would be getting curious, being kind, and just plain understanding. (Friends leave when you don’t find a way to be generous, but here you are stuck with your own judging internal voice 24/7.) Next time you stall or get off track - try some curiosity - what might have happened here, friend? Being generous doesn’t mean not being honest, its more like staying on your own side.

Shift Focus on Doing to Being

We are living in a world of “to do’s.” It is easy to focus only on what did or didn’t get done. But how we do things can be just as important, even more important. Shifting your attention to how you are, rather than what you did, can open up new possibilities. How are you doing at being present today? Are you peaceful and open? Panicky and frightened? Creative and energized? Whatever you are, notice it. Now breathe and let it be.

Offer Yourself a New Perspective

Journaling, a brisk walk, a phone conversation with a friend, dancing in the grocery store, a meet up in a coffee shop, reading some poetry, working in the garden, one of these body and mind diversions is likely to help when you feel stuck. Whatever is happening, a perspective change is always within your control.

Real Estate

The Free Press shared a piece yesterday “How Real Estate-ism Did the Deal in Gaza.” Link here Niall Ferguson’s piece got me thinking about the characteristics of successful real estate developers. I got to know a lot of real estate developers working at the Urban Land Institute, and they are a very rare type of human. You know they love to make deals, but did you know they tend also to be:

• Optimistic. Imagine putting all your money, and all the money of your closest friends and family on the table for a deal — then making it happen — for the very first time. Every developer has been there.

• Good at putting relationships first, regardless of disagreements and conflicts. They can be fighting it out with someone today, but they may need them tomorow, so they learn to disagree when it counts, but not to burn bridges.

• Willing to work as long and as hard as it takes to motivate groups of people to solve problems together. Think of an orchestra conductor composing as they conduct.

• Motivated by real world results. The results of their work, real estate developments, are highly public; whole communities will have an opinion and a stake in the results for decades to come.

• Equally good with words and numbers. The deal has to “pencil” and material circumstances are subject to change. At the same time, the developer is the chief architect and seller of the deal; they will have to convince everyone that this can and will happen again and again and again.

• Appreciative of all different kinds of people and what they bring to a project. It takes a village to approve and execute a real estate development.

• Natural connectors, developers pride themselves on bringing people together and making things happen.

We could do worse than leaving it to developers to push through challenges in our communities. But you do not tend to hear them making suggestions. This is probably because they tend to be focused on the next deal. The deal they orchestrate has to work for them first and foremost (or it could be their last). Fortunately, once they are invested, they have preternatural confidence that the deal will work out, regardless of obstacles or the lessons of history, which is why some actually do.

Thanks for being a part of our community of change makers.

I look forward to hearing from my “never shy” (!) subscribers, as always.

Cindy

P.S. If you want a ten point self-assessment for Board reviews to get you started, please reach out. [email protected]

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