Findings from Gartner’s 2023 Board of Directors Survey
Gartner’s 2023 Board of Directors Survey has provided some key takeaways about the latest and greatest in governance. Including 281 board directors and members of various boards across industries and geographies, Gartner reported on the focuses of executive leaders; where they are now, and where they are headed. This survey aims to understand this group’s actions and intentions regarding risk appetite and growth strategies, digital acceleration, sustainability, diversity, equity, and inclusion (DEI).
In our world of investor relations, this news is crucial to understanding how to innovate our industry in alignment with influential decision-makers. With the current state of economic insecurity, surveys allow us to make informed decisions. Gartner Distinguished VP Analyst, Partha Iyengar, speaks to the power of this knowledge, stating, “Executive leaders need to understand board priorities in these turbulent times so that they can align their activities and investments with the enterprise’s strategy direction, which is typically set by the board.”
The survey findings divide this fascinating new data into some integral categories of business development. All rooted in innovation, the takeaways will help businesses push their teams forward through the lens of our industry’s executives. The key messages reiterate how rapidly this industry changes and how best we can keep up.
Risk Appetite and Growth Strategies
With 64% of boards of directors expected to increase their risk appetite in 2023-2024, this pocket of the industry is driving deserved attention. Post Covid-19 pandemic, the business world has experienced financial stressors that have changed operations. Fighting looming potential recessions, economic uncertainty, and inflation rates have been difficult to combat for many companies.
The survey showed us that board of directors are more willing to accept risk to drive growth. Embracing innovative approaches to do so, digital tech initiatives and workforce issues (i.e. retention, training, and hiring) are the top strategic business priorities of the surveyed boards.
Looking forward:
“Digital optimization and digital customer experience are the top “postdigital” business growth initiatives through 2024.”
Digital Acceleration
The influx of digitization means that digital acceleration is entirely expected. The board of directors will likely be narrowing in on digital acceleration initiatives, shifting their focus from business optimization to transformation. Digital leaders are achieving this transformation through the warm welcoming of new technologies. 60% of boards say that they have achieved their digital business optimization goals, while 19% have started in their advancements towards digital transformation.
The good news is that organizations have been investing in digital business initiatives for an average of six years. This means that the digital leaders — typically with executives and CEOs steering the ship — are making progress in business growth using new tools and centralizing business success in their digital implementation and customer narratives.
Looking forward:
“AI/machine learning, software enhancements, and data and analytics are seen as the top technologies that are key to digital business success.”
Sustainability and DEI
It is no surprise that the operational expenditure (opex) budget was name-dropped in this survey's findings as environmental, social, and governance (ESG) initiatives are skyrocketing. Opex budgets are an essential part of this conversation, as they fund the on-the-ground action of impactful sustainability and DEI efforts.
Over 80% of boards reported that stakeholders consider sustainability and DEI when evaluating and interacting with their organizations. This is because the increased anticipation of ESG priorities drives more investments as stakeholder interest influences the implementation of DEI efforts.
Looking forward:
“Greater consideration among employees, investors, and society is driving an increase in sustainability investments.”
Executives and their teams are using new approaches to grow their businesses. As the business environment continues to fluctuate, it is our job as industry and thought leaders to not only keep up but to think ahead. As societal pressures around ESG increase, enterprise and board priorities shift along with the industry.
Deborah Rosati, Founder & CEO of Women Get On Board advocates for good governance and leads the way to empower women to corporate boards.
“As stewards of the future, board members need to be resilient and agile to adapt to a complex and changing environment,” said Rosati. “We need an innovative mindset to anticipate, prepare and respond to strategic initiatives like digital governance, sustainability, DEI and ESG priorities.”
When Principal and Co-Founder of irlabs, Alyssa Barry, sat down for a Q&A about ESG in investor relations, a similar motif floated to the surface as she dug into the “whys” behind the forward-thinking choices businesses are striving on:
“From corporate governance policy, social and sustainability initiatives — it’s about thinking thoughtfully about the impact your business has on all stakeholders it serves. It’s a critical topic in the market regardless of industry, and it will only increase as regulations are introduced.”
The 2023 Gartner’s Board of Directors Survey taught us much about what we can expect through 2023–2024. Mainly, it reiterated the need to be malleable and future-proofed. With this structural data influencing decisions and bringing awareness to the minds of executive leaders, we’re excited to utilize these survey findings in our work.
irlabs is committed to developing and supporting our clients while participating in these conversations to advocate for our industry. If you have any questions or want to learn more, contact happyinvestors@irlabs.ca.