Directors are becoming increasingly involved in business operations as confidence in executive teams decreases

The once clear line between non-executive directors and senior management is becoming increasingly blurred, with a significant number of business leaders reporting a lack of full confidence in their executive teams to manage operations effectively.

According to an annual report from Heidrick & Struggles, the global headhunting firm, more than a fifth of directors surveyed, including those from FTSE 350 companies, expressed concerns about the ability of their executive teams to ‘get things done’.

The report, which surveyed more than 3,000 CEOs and directors worldwide, highlights a growing trend of non-executive board members becoming increasingly operationally involved. This shift is particularly pronounced in Britain, where almost three-quarters of respondents recognize greater board involvement in day-to-day operations, with 22% reporting frequent involvement and 49% noting occasional participation.

This increased engagement is attributed to several factors, including board members’ desire to gain a deeper understanding of company operations (cited by 43% of UK respondents) and the need to support CEOs who are overwhelmed by the demands on their role (21%). The most troubling finding, however, is that 22% of respondents believe this involvement stems from a lack of confidence in the management team’s ability to effectively manage operations.

Kit Bingham, partner and head of the UK governance practice at Heidrick & Struggles, noted that pressure on boards has increased, driven by investor expectations, regulatory demands and the complexity of modern business challenges such as artificial intelligence, cyber security and ecological, social challenges. and governance issues (ESG). “Ultimately, the challenges and expectations within boards are greater than ever,” Bingham said.

Alice Breeden, managing partner of the regional practice at Heidrick & Struggles, pointed to the resulting tensions within the boardroom. “Boards may spend more time on operations than necessary just to reassure themselves that they know what’s going on and that executives understand it,” she explained.

The level of operational involvement of boards of directors varies by country and sector, with the financial sector reporting the least involvement globally. However, the trend is reshaping the role of boards of directors in the business landscape.

Mark Cutifani, former CEO of Anglo American and current chairman of Vale Base Metals, who contributed to the report, noted that the role of the board is “changing quite significantly, much more significantly than we probably realize.” He emphasized that boards need to play a more active role in various aspects of the business, as the complexity of today’s business environment demands more than what a CEO can manage alone. “You need some off the plate,” Cutifani concluded.

This shift in board dynamics underscores the evolving challenges facing companies today and the critical need for a joined-up approach to leadership and governance.