This is the Impact Study written for corporate boards, and marked for board discussion. Its context is that CEOs are pulled in every direction by better-informed and more demanding stakeholders while a run of crises has renewed the focus on the bottom line.
The summary argues that as expectations shift from short-term shareholder primacy to sustained value creation, boards are at the forefront of helping leadership navigate it, and that they need a roadmap and a checklist.
Key findings
- Seventy-eight percent of US board members believe they have an opportunity to play a more critical role in delivering sustained value for all stakeholders, while grappling with quarter-to-quarter urgencies.
- The conflict is structural rather than attitudinal. A long-term focus on stakeholders often runs against how board members have been operating and incentivized for decades.
- The reason many boards resist is fear of getting it wrong and landing in the crosshairs of the culture wars, having watched companies face backlash, public embarrassment, and financial loss.
- Ninety percent of overperforming companies view stakeholder value creation as a business opportunity rather than a risk.
- The intangibles the study asks boards to measure are said to form 80 percent of corporate value, including customer data, employee loyalty, and community reputation.
The five drivers, stated for a board
Overperformers ground strategy in an understanding of their own company’s DNA, values, and beliefs alongside their stakeholders’ perspectives, reality, needs, and interests. They reimagine the market’s future with a positive vision and a clear view of the role the company will play.
They focus the business with an integrated long-term strategy, educate stakeholders, align executive rewards with shared value metrics, and address short-term challenges inside that strategy.
They organize for interdependence across internal silos and the external partner ecosystem, and they unleash leadership potential by cultivating Da Vinci leadership that integrates analytical, creative, and empathetic behavior.
What the board should demand of the CEO
The first demand is stakeholder-centricity: better understanding, engagement, and representation of stakeholders in strategic decisions. The examples given are a shared materiality matrix and shadow boards.
Next is an aligned vision of the emerging future and a clear corporate role that lets short-term decisions be made in a long-term context, and a holistic strategy per stakeholder group that enables choices about what not to do.
The last three are shared KPIs for intangible assets, realigned incentive plans and compensation that take all stakeholders into account, and training and incentives for Da Vinci leadership mindsets and behaviors.
How the board governs differently, and who sits on it
Boards that evolve create time to discuss stakeholder mapping, engagement, and value creation, focus also on long-term growth opportunities, and encourage transparency in internal and external discussions.
They also adopt Da Vinci behaviors and actively seek outside-in perspectives, including recruiting more marketing talent and expertise onto the board.
The Da Vinci leader profile, developed by IRG with Spencer Stuart and The B Team, describes leaders who are open-minded, courageous, future-focused, optimistic, and authentic.
Composition follows from that. Future-fit boards ensure cognitive diversity across expertise, tenure, and experience as well as demographics, and reassess the skill sets of the board and CEO on an ongoing basis.
The questions put to the board
Five questions close the summary, starting with whether Humanized Growth is a priority topic on the board and whether it is treated as a risk or a growth opportunity.
The rest ask what best practices directors have observed, which board practices help, and whether the recommendations would lead boards to reassess their priorities and governance approach.
The framing borrows the NACD’s own language. Boards are asked to govern into the future as stewards of long-term value creation for all stakeholders, from the NACD’s Ten Principles.
Scope and limitations
One figure is drawn from an outside source rather than the study: the report attributes to WTW Global the finding that 77 percent of listed companies now include ESG metrics in incentive plans. The 78 percent board figure is specific to the United States.
Source
This page summarises The IRG Impact Study – Corporate Board Executive Summary, by Institute for Real Growth (IRG), National Association of Corporate Directors (NACD), 2024-08-14.