When executive leaders understand board priorities, they can align their activities and investments with the enterprise’s strategic direction.
With organizations continuing to face economic uncertainty, executive leaders are focused on developing and enacting business strategies that respond to a rapidly changing environment. The Gartner 2023 Board of Directors Survey, which included 281 board directors and members of various boards across industries and geographies, aims to understand the group’s focus on investments in digital acceleration; sustainability; and diversity, equity and inclusion (DEI).
“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,” says Gartner Distinguished VP Analyst Partha Iyengar. “Societal pressures around environmental, social and governance (ESG) and DEI are increasingly impacting enterprise and board priorities.”
In his presentation at the Gartner IT Symposium/Xpo™ 2022 conference, Partha shared key take-aways from the Gartner Board of Directors Survey for 2023.
To drive growth in a rapidly changing business environment, boards of directors will need to embrace fresh approaches. Boards are willing to accept greater risk in expanding product lines, transforming ways of working and entering new markets. A looming possible recession, economic uncertainty and inflationary pressures are among the top 3 external threats and constraints to growth.
64% of boards of directors expect to increase their risk appetite in 2023-2024.
Boards of directors are willing to accept greater risk in expanding product lines, transforming ways of working and entering new markets.
Digital tech initiatives and workforce issues (e.g., retention, training and hiring) are the top strategic business priorities for boards of directors for 2023-2024.
89% of boards of directors believe that we are in a postdigital world, which is to say digital no longer plays an implicit role in their growth strategies.
Digital optimization and digital customer experience are the top “postdigital” business growth initiatives through 2024.
Boards of directors will most likely sharpen the focus of their digital acceleration initiatives by creating a new economic architecture that devotes more attention to business transformation, rather than optimization. Currently, 60% of boards say they have achieved their digital business optimization goals, while 19% have advanced toward digital transformation.
On average, organizations have been investing in digital business initiatives for six years.
60% of organizations have either made the desired level of progress on or achieved their digital business optimization goals.
Digital leaders have made relatively more progress in achieving digital transformation goals than digital laggards.
71% of organizations are prioritizing a digital economic architecture.
The CEO is the primary leader responsible for driving digital business initiatives.
53% of boards of directors say the primary digital leader is an executive member of the board and a key part of digital business discussions.
Primary digital leaders can improve their role in driving digital optimization and customer centricity for increased digital business success.
AI/machine learning, software enhancements, and data and analytics are seen as the top technologies that are key to digital business success.
In the coming years, boards of directors anticipate more investment in and focus on sustainability and (DEI), which are primarily funded by an increasing operational expenditure (opex) budget. Stakeholder considerations have expanded and are driving more investments in sustainability and DEI for the majority of organizations through 2024.
Sustainability investments are primarily funded by increasing opex and capital expenditure (capex) budgets; DEI investments are primarily funded by an increasing opex budget.
Over 80% of boards report that stakeholders consider sustainability and DEI when evaluating and interacting with their organizations.
Greater consideration among employees, investors and society is driving an increase in sustainability investments.
Stakeholder interest influences the increase in DEI investments.
Executives and their teams will need new approaches to drive growth in a rapidly changing business environment.
To do this, organizations will shift their focus to business transformation and creating a new economic architecture.
They will spotlight sustainability and DEI, and increase investments.
Partha Iyengar is Distinguished VP Analyst and Gartner Fellow on the Gartner CEO Research team. He is also Country Leader for, Research in India. His research interests cover areas of strategic interest to CEOs and their direct reports, including digital business, digital business maturity assessments, customer experience, expectations of the CIO and IT organization, and globalization issues, including Global Insourced Centers (GICs).
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