Are Boards Doing Enough to Improve Effectiveness?
Effective board oversight provides CEOs with guidance to navigate complex challenges, including strategic shifts, regulatory changes and evolving market dynamics.
PwC's 2025 Annual Corporate Directors Survey shows that 55% of directors say at least one fellow board member should be replaced - a six-point increase from 2024 and the first time a majority has indicated this.
The survey, which collected responses from more than 600 US public company directors, identifies specific areas of underperformance:
- 41% say a colleague does not contribute meaningfully to discussions
- 34% believe a director's long tenure has led to diminished performance
- 21% report a peer lacks relevant expertise for the role
- 20% cite an interaction style that negatively affects board dynamics
These findings show that directors are increasingly able to recognise gaps in board performance. However, boards often maintain underperforming members due to a culture of collegiality.
While respect and civility are essential to effective governance, PwC says that boards and directors also need to maintain a mix of skills and perspectives that align with corporate strategy and evolving challenges.
PwC identifies three key areas where boards and directors can take action to improve overall effectiveness.
- 88% of directors say they can take at least one action to improve board effectiveness, such as speaking up more or pursuing additional training
- 78% of directors report that their board's assessment process does not fully capture overall performance, highlighting an opportunity for performance
Individual directors can strengthen their contributions
Directors have opportunities to actively enhance board performance, according to PwC. In the survey, 88% of respondents said they could take at least one action to improve board effectiveness.
Examples include speaking up more during discussions, pursuing additional education or training and gaining direct, hands-on experience in relevant business areas.
By taking initiative, directors can ensure they are making meaningful contributions and bringing valuable insights to strategic discussions.
Board leaders conducting direct performance conversations
The study outlines that leadership at board level plays a central role in setting expectations and maintaining performance standards.
Board and committee chairs, including lead independent directors where the CEO also serves as Chair, should establish clear performance expectations and provide timely, constructive feedback, PwC advises.
Normalising candid, respectful conversations ensures that directors receive actionable guidance and allows boards to address gaps in skills or engagement effectively.
PwC says that strong interpersonal relationships among board members can make these conversations more productive and reinforce a culture of accountability.
Boards should strengthen assessment processes
Board assessments often serve as routine exercises rather than drivers of change. According to the survey, 78% of directors believe that boards' assessment processes does not fully capture overall board performance.
To address this, the study suggests that boards should treat assessments as a tool for improving effectiveness. Periodically engaging an independent, experiences facilitator can provide impartial insights, enable more comprehensive feedback, reduce internal biases and translate findings into actionable improvements.
This approach ensures assessments lead to meaningful changes in board composition, processes and overall governance quality.
