UK boards also appear less concerned about cybersecurity than their EU counterparts as attention turns to emerging technology and AI
Heidrick & Struggles (Nasdaq: HSII), the global provider of executive search and leadership advisory services, has published its annual Board Monitor Report for 2024. The latest edition of the report provides detailed insights into the habits and concerns of boards of the UK’s FTSE350 companies as they continue to navigate complex operational and economic landscapes.
The report, part of Heidrick & Struggles’ long-standing study of trends in board composition in a wide range of leading global markets, analyses the responses of more than 3,000 CEOs and company executives at firms of varying sizes, in the UK and around the world.
Key Findings of Heidrick & Struggles UK Board Monitor 2024
- Over a fifth of UK respondents believe the board does not fully trust their executive teams to get things done.
- 96% of UK board members believe the board should engage with employees from deeper within their company.
- 55% of UK boards have an increased focused on cybersecurity concerns, compared to 68% in the EU.
- 61% of UK boards have an increased focus on sustainability, well ahead of the global average of 54%.
Amid the results of the 2024 Board Monitor, key themes emerged, representing shifts that boards are making to thrive in challenging business environments.
Increasing Board Involvement in Operations
Amid a challenging business, economic and political landscape, directors across the globe have been grappling with the boundaries of their respective roles as they strike a balance between oversight, strategic direction and day-to-day management. To better understand the issue, the Board Monitor survey sought responses regarding whether members may be crossing the traditional line between oversight and management.
Globally, most respondents report that board members are more operationally involved: 25% say it happens frequently; 45% occasionally. The figures from UK respondents are similar, at 22% and 49% respectively. Almost three-quarters of respondents in the UK state that boards have increased their operational involvement overall.
The reasons for this increased operational involvement vary from a desire to know more about operations (43%), to the CEO requiring assistance from the board due to demands on their bandwidth (21%). However, most concerning is the perception among 22% of respondents that the board does not fully trust the executive team to get things done.
In addition, UK respondents far more often than others believe the board should engage with groups of employees (61% vs 34% global) — though only 6% think a direct employee representative on the board is a promising idea. This relatively high figure suggests broad satisfaction with the UK corporate governance code obligation that boards have formal structures in place for board/employee engagement.
Commenting on the data, Alice Breeden, Regional practice managing partner, CEO & Board of Directors Practice, Europe and Africa, Heidrick & Struggles, said: “The relationship between the board and management, and particularly the chair and the CEO is critical to driving a high performing organization. As the pressures, expectations and responsibilities of board members continue to expand, it is easy to see how this pressure is then put back on executives to provide as much detail and access as the board feel is necessary to govern the business. With this constant balancing act adding stress to both sides, the need for stronger pulse on the business without overreaching will continue to be a challenge.”
The Board View on Influence, Attention, and Representation
The survey asked directors and CEOs to stipulate which stakeholders have grown their influence in the post-Covid environment. Overall, influence has grown among the broader workforce (49%), regulators (49%), the CEO and leadership team (47%) and consumers (43%).
However, despite their traditional influence over the board, the influence of stockholders has not enjoyed the same kind of growth in recent years. Just 22% of members report an increased influence among mainstream investors, dropping to 13% among “activist investors”.
In other words, changes in the ways boards approach their work do not come first from the shareholders they serve, but from the operational, commercial, and regulatory contributors to the business.
The lack of growth in shareholders’ influence is no cause for concern among respondents; 76% of UK board members report a high level of satisfaction with the current status quo.
Kit Bingham, Partner and Head of UK Board Practice in Heidrick & Struggles, commented: “The pressure on boards continues to increase and comes from multiple sources including investors, regulators, government, media, and wider society. The spread of issues also continues to proliferate, ranging from environmental, social, and governance to geopolitics to AI and cybersecurity. Combined, the challenges and expectations on boards are ultimately greater than ever. Board directors now need breadth of experience, as well as a depth of expertise in particular topics, combined with agility and a willingness to learn.”
As new influences and concerns come to the fore, Board Monitor also explores a shift in how boards are spending their time and where they are applying their attention. Naturally, almost half of the board’s time (44%) is spent on traditional board oversight and strategic responsibilities, followed by portions of time examining global risks (10%), shareholder and employee-driven topics (10%), the opportunities and risks of new technology (9%) and crisis management (6%).
Unsurprisingly, the topic on which the board has most increased its time spent is emerging technology and AI, at 71% (UK and global figure, behind the EU at 74%). Cyber risk has fallen, on the other hand, with just 55% of UK boards showing an increased interest, significantly lower than that of other regions.
Other areas in which UK boards have increased their attention include sustainability (61%), geopolitical volatility (61%), financial performance and risk (56%) and DEI (51%). Interestingly, UK boards’ growth around diversity, equality, inclusion, and wellbeing is significantly ahead of the global figure, where just 42% of boards have increased their focus.
In 2024, the representation of women on FTSE 350 boards increased beyond the target of 40% of directors being women by the end of 2025. 235 were at or above 40% and only 28 below one-third. The share of female directors added in the most recent year remained high, suggesting progress is continuing.
To this point, Bingham added: “Most boards remain committed to building companies that reflect the employee and the customer populations they serve. The long-term trends reflect strong progress—and uncover room for improvement. There is always room to do better.”
How Boards are Addressing Risk
This year’s Board Monitor Report has found that change in the boardroom requires a novel approach to governance. To better understand how boards are adjusting to this new reality, respondents were asked what steps they have taken, since Covid, to better manage uncertainty and risk.
Risk management practices that are “internal” in nature remain boards’ preferred method of risk management. However, the report also acknowledges a growing willingness to draw on contributions from “external” experts.
UK board members are spending more time addressing risk than directors in almost any other region, including time spent understanding and defining risks. All these efforts add to the overall burden on board members that so many in the United Kingdom are feeling acutely.
While financial and operational risk management remain paramount, more attention is being paid to emerging cyber, AI, and geopolitical risks alongside environmental and social concerns and regulations. Increased investment is paying off for companies that invest in novel approaches to expanding capacity and expertise.
