Dive Brief:
- The share of board directors surveyed who see a fellow board member’s “insufficient expertise” as warranting their replacement nearly doubled to 39% this year from 21% last year, with 55% saying at least one colleague should step down, according to a PwC report released Wednesday.
- At the same time, the report found a disconnect in what boards say they look for in new members with a majority (81%) saying that weighing candidate’s cultural fit or alignment is very important when picking new members. Meanwhile, only 27% named rated specialized expertise as a top skill needed, according to the Big Four company’s 2026 Annual Corporate Directors Survey.
- “The bar has been raised regarding the expectations for the role over the last 10 years or so,” Paul DeNicola, principal in PwC’s Governance Insights Center, said in an interview. “The business environment is more broadly driving the discontent.”
Dive Insight:
While AI and other fast-changing tech advancements are shaking up expectations for corporations and their business models, DeNicola said cybersecurity and sustainability are other areas that have sparked similar board demand for expertise in the past.
DeNicola said he wasn’t clear why there’s a disconnect between respondents’ interest in getting more experts and what they look for in new boards. But he said part of the concerns about expertise might stem from board members being increasingly under pressure amid initiatives like digital transformation projects to give more time to the job, and board members have also faced a more volatile business climate.
Still, AI is a key concern of boards. Nearly three-quarters (71%) of the survey’s respondents said their boards need to improve their AI skills in order to do their job and provide oversight of the technology. “AI is perhaps the clearest example of how quickly capability needs are changing,” the report states.
To be sure, some companies are reaching out for that help on their boards. For example, cryptocurrency platform Coinbase Global named Anthony Armstrong — a long-time Elon Musk adviser and former CFO of xAI and X Corp. — to its board of directors, CFO Dive previously reported.
DiNicola said there are other ways to bring more expertise to a board, such as educating or upskilling the current board. And he said a board filled with narrow subject experts rather than seasoned executives who can handle other subjects isn’t ideal.
“It doesn’t make sense to have a board filled with people who are deep but narrow in a particular area,” he said. “I think most would want people with broad business judgement.”
The report is based on responses from 599 directors representing several industries, with 81% of the companies having annual revenues of over $1 billion.
