Board oversight and agenda
Overall, a majority of companies in our research assign stakeholder capitalism to the board as a whole: 61 percent of respondents say the main board has some oversight of stakeholder capitalism issues. The most frequently cited board panel with some oversight is the nominating and governance committee, mentioned by one in five respondents.
Otherwise, respondents say some oversight is assigned to the audit (7 percent of respondents), compensation (6 percent) or risk (6 percent) committee. In a sign that these issues have not yet gained universal acceptance, almost a quarter (23 percent) of respondents say their company does not consider stakeholder capitalism.
These patterns are broadly similar across different sizes of companies. But higher percentages of respondents at mega-cap (29 percent) and large-cap (34 percent) companies say their nominating and governance committees have some oversight of stakeholder capitalism matters, compared with 17 percent of those at mid-cap companies and just 11 percent of those at small caps saying the same.
Fourteen percent of respondents at mid-caps say their board’s compensation committee has some oversight, more than their peers at large caps (6 percent), mega-caps and small caps (4 percent each). Among small-cap firms, 11 percent say their audit committee has some oversight, more than their peers at mega-caps (8 percent), mid-caps (7 percent) and large caps (3 percent).
More than a quarter (28 percent) of respondents in North America report that their nominating and governance committee has some oversight of stakeholder capitalism matters, compared with just 10 percent of those in Europe. A third of respondents in Europe say their company does not consider stakeholder capitalism at all, while only one in five respondents in North America say likewise.
Almost a fifth (19 percent) of all respondents say the board committee(s) that oversees stakeholder capitalism matters reports to the main board on those issues at every board meeting. Only a few (4 percent) do so at every other board meeting or once a year (9 percent). And more than four in 10 respondents (44 percent) say such reporting happens on an ad hoc basis.
Again, there are variations according to company size, although the broad pattern applies. Just 7 percent of respondents at large-cap companies say reports are made to the main board at every meeting, while 61 percent say it happens on an ad hoc basis. By contrast, almost a third (32 percent) of those at mega-caps say reporting takes place at every board meeting and 36 percent say it happens on an ad hoc basis. Respondents at small caps (24 percent) are more than three times as likely as those at large-cap companies to say committees report to the main board at every meeting.
Boards that take an interest in stakeholder capitalism are more likely to receive regular updates in Europe, where 29 percent of respondents report updates to the board at every meeting, compared with 15 percent of respondents in North America. More than half (51 percent) of those in North America say these reports are given to the board on an ad hoc basis, compared with 36 percent of those in Europe who say the same.
Unsurprisingly, the frequency with which the main board discusses stakeholder capitalism issues follows a similar pattern to how often it receives reports from the relevant committee/s. Overall, just under half (49 percent) have these discussions on an ad hoc basis, while 16 percent do so at every board meeting.
Almost a quarter (23 percent) of respondents at mega-caps report that their board discusses stakeholder capitalism issues at every meeting, compared with 18 percent of those at small caps, 13 percent of those at mid-caps and 11 percent of those at large-cap firms. A quarter of respondents in Europe say their board has such discussions every time it meets, while just 12 percent of those in North America say the same.
