Tricor Group and the Financial Times Board Director Programme co-released the inaugural Asia Pacific Board Director Barometer Report, uncovering corporate board sentiments on COVID-19 disruptions globally with a focus on APAC markets together with samples drawn globally, including from the United States (US).
According to the 2021 Asia Pacific Board Director Barometer Report:
- Corporate boards in the US, APAC and globally are struggling to keep pace with rising digital adoption and transformation pressures against the turbulent headwinds of the COVID-19 pandemic.
- Business continuity planning (BCP) and corporate governance, risk & compliance (GRC) are weighing on board directors in the US, APAC and globally, rising to the top of corporate board priorities.
- Corporate boards in the US, APAC and globally are not necessarily equipped to support effective hybrid meeting models, which are expected be the most favored operating model post-pandemic.
- The digital divide is continuing to widen and corporate boards globally are falling behind, highlighting operational and security risks and inefficiencies.
- Gaps in cybersecurity threaten corporate board operations and integrity.
The Report reveals sentiments and actions of board directors across the globe in key areas of digital transformation, cybersecurity, board operations, corporate governance, risk & compliance (GRC) and business continuity planning (BCP). It is an in-depth survey conducted amongst 771 board directors representing a spectrum of startups, small and medium-sized enterprises (SMEs), multinational corporations (MNCs), non-profits and listed companies across 12 major industries. The sampling focuses largely on key markets in APAC (including mainland China, Hong Kong SAR, Malaysia Singapore, Thailand, Vietnam, Japan and Australia) and also incorporates comparative samples from the US, Europe and Africa.
Key findings from the report include:
- BCP and GRC pressures are weighing on boards, with an overwhelming 83% of corporate board directors globally and 84% in APAC citing these as top priorities. Overall, confidence about the handling of the crisis is mixed. In the US, 50% of board directors said they feel positive about the way their boards have responded, compared to Singapore (71%), mainland China (68%), Malaysia (56%), Thailand (52%), Hong Kong (51%), Australia, Japan (45%) and Vietnam (42%).
- Triggered by the mass virtualization following COVID-19, data security has emerged as a pressing concern for 83% boards globally. However, these sentiments have not yet been followed up with corrective action. For example, although 86% of board directors in the US said data security was an ongoing concern, only 57% said their boards had taken dedicated actions during COVID-19 to improve data security. This disconnect between concern and action was also observed amongst directors globally and in APAC, suggesting that a majority of boards could still be operating within inadequate, outdated cybersecurity frameworks.
- Compared to APAC, corporate boards in the US are more receptive to engaging third-party expertise and solutions. While 79% of directors in the US reported their boards would consider engaging third-party expertise to help independently assess GRC and BCP frameworks, APAC was less receptive with just 48% of directors reporting their board would consider third-party expertise and solutions.
- Corporate boards are unprepared to meet security and efficiency requirements for virtual meetings – both currently and post-pandemic: The massive shift to remote work models was reflected in the survey results, with board directors globally reporting that meetings went from being 5% virtual pre-pandemic to 5% in-person since the outbreak of COVID-19. However, without the tools needed to ensure security and efficiency, many boards are unprepared to operate in a hybrid format, which will be the most popular meeting format post-pandemic globally. In the US, 50% of board directors reported that their boards will meet in a hybrid format post-pandemic with an additional 21% reporting their boards will likely meet virtually for a majority of their meetings.
- Concerningly, one in four corporate boards are not taking action to transform business to bridge widening digital adoption gaps. To prepare for a post-pandemic future, 73% of directors globally said their boards are actively exploring new digital tools. The US slumped in this area, with 64% of directors reporting their boards to be exploring new digital tools. In APAC, Vietnam, Thailand, Japan and Malaysia surpassed the global average at 92%, 79%, 78% and 76% respectively. However, these numbers tracked lower in Hong Kong (70%), mainland China (68%) and Singapore (67%) indicating that large segments of corporate boards in the region have also not adopted the digital board portals, digital governance tools and solutions needed to shift from just surviving to thriving virtually.
- Board directors are clamoring for more corporate governance training to increase capabilities: 94% of directors globally said they need more training while just 58% are receiving it. These statistics were exactly matched by the survey’s sample of board directors in APAC. In the US, all of the directors in the survey sample said they need more training and just 64% reported are currently receiving it.
Lennard Yong, Tricor Group CEO, said: “The COVID-19 pandemic has triggered a crisis of epic proportions in APAC and beyond, impacting boards of directors from nearly every organization across all industries. Since the onset of the pandemic, Tricor has received an increasing number of inquiries from organizations looking to fortify board resiliency and adopt digital board governance in the face of ongoing business disruptions. Our expert team, equipped with a wealth of integrated, digital-enabled services and diversified corporate governance solutions, is dedicated to helping boards acclimate in the evolving business environment and thrive in the face of uncertainty.”
Gary Tok, Tricor Group Chief Commercial Officer, noting the Report’s finding in APAC that showed that directors were generally reluctant to turn to third party solutions said: “Tricor has developed Boardfolio, an end-to-end digital board management platform, which enables immediate and seamless collaboration between the board of directors and management in a secure, cost effective and efficient manner. Our own research shows that this will be of growing interest in such board effectiveness tools as virtualisation of board meetings extend beyond the current situation with COVID-19.”
Ian Comins, CEO of Tricor Offshore, said: “The data in the Report suggests that pandemic-induced trends have heightened the focus of corporate boards on BCP and GRC whilst also suggesting a concerning disconnect between sentiment and action. We know that GRC hazards and operational pitfalls are intensifying in this continuously evolving business landscape and, in particular, businesses with offshore entities may be at greater risk as the result of heightened scrutiny and growing legislative requirements. At Tricor Offshore, we’ve followed the trend towards digitalisation and virtual board meetings and we’re working with clients’ boards to help ensure the risks are recognized and managed and the stakeholder assets and interests are protected.”
Sunshine Farzan, Tricor Group Head of Marketing & Communications, said: “Corporate boards have a fiduciary responsibility to mitigate risk, carefully hedging against catastrophes and outlier events that could overwhelm an organization and threaten shareholders’ investments. But in the face of continuous COVID-19 disruptions, the 2021 Asia Pacific Board Director Barometer Report confirms that board concerns have reached critical mass in cybersecurity, digitization, GRC and BCP. By highlighting impending challenges and outlining key areas for improvement, this report can help boards take the next steps toward business continuity and resiliency.”
In addition to the proprietary findings, the 2021 Asia Pacific Board Director Barometer Report also features secondary research findings, key insights, industry analysis, focus area recommendations and best practices to help boards better understand how their contemporaries are navigating the ongoing business disruptions amid the pandemic. To access the full report, please visit www.tricorglobal.com/2021-asia-pacific-board-director-barometer-report.
About Tricor United States
F&L-Tricor was established in 2018 to build on Fitzgerald & Law’s and Tricor Group’s respective reputations for providing excellent advice and first-class service to corporate and individual clients alike. Whether you are a start-up or existing multinational, we provide personalized, scalable solutions to companies both large and small, across all sectors.
Tricor Group (Tricor) is the leading business expansion specialist in Asia, with global knowledge and local expertise in business, corporate, investor, human resources & payroll, corporate trust & debt services, fund administration, and strategic business advisory. Strategically headquartered in Hong Kong, we operate out of 21 countries/territories and across a network of 47 offices. Tricor serves 50,000 clients, including ~2,000 companies publicly listed in Asia and over 40% of the Fortune Global 500 companies. With 2,800 employees, we deliver critical functions to help ambitious companies accelerate their growth in Asia and beyond.
Tricor’s advantage comes from deep industry experience, committed staff, technology-driven processes, standardized methodologies, constant attention to changes in laws and regulations and wide industry contacts. Tricor is uniquely positioned to unlock the potential of your business, and help you stay one step ahead of today’s diverse and fast evolving regulatory environment.
To learn more, please visit: https://www.tricorglobal.com/locations/united-states