Corporate boards are under pressure to take more responsibility for developing strategy and overseeing business risk after the financial crisis exposed many cases of inadequate governance.¹ Yet, according to the latest McKinsey Quarterly survey on governance,² directors report that their boards have not increased the time spent on company strategy since our previous survey, conducted in February 2008—seven months before the collapse of Lehman Brothers. Moreover, 44 percent of respondents say their boards simply review and approve management’s proposed strategies. Just one-quarter characterize their boards’ overall performance as excellent or very good; even so, the share of boards that formally evaluate their directors has dropped over the past three years.

In this survey, we asked directors how much time their boards spend on different activities, how well they understand the issues their companies face, and what factors they think would be most effective in improving board performance. The picture that emerges is that boards have taken to heart the new and higher demands placed on them. But some directors say they feel ill equipped to live up to these expectations because of inadequate expertise about the business and the lack of time they can commit to their board duties, which they say is less than ideal for them to cover all board-related topics in proper depth.