PwC Malaysia executive chair Nurul A’in Abdul Latif.
KUALA LUMPUR: Directors recognise the potential of board diversity, generative artificial intelligence (GenAI) and environmental, social and governance (ESG) but face obstacles in translating this into effective action, according to a survey by PwC Malaysia.
PwC Malaysia’s inaugural Corporate Directors Survey found that most directors are confident in fulfilling routine governance duties, with 96% successfully establishing corporate governance structures and controls and 90% effectively navigating policy and regulatory changes.
“However, concerns remain about agility in navigating critical emerging issues,” PwC Malaysia said in a statement.
It said, for instance, while 75% of respondents acknowledge the importance of GenAI and cybersecurity, only 4% have developed sufficient skills to effectively oversee their firms’ strategies in these areas.
PwC Malaysia said this underscored a critical skills gap that must be addressed for boards to evolve more swiftly and ensure ongoing business sustainability.
“Meanwhile, all respondents reported discussing at least one sustainability topic in board meetings over the past year, yet fewer than one-fifth fully understand how their company’s climate commitments impact capital allocation decisions.
“Additionally, only 25% believe that board diversity leads to better board or company performance, even though 53% of surveyed directors agree that diversity brings valuable perspectives to the boardroom,” it said.
PwC Malaysia executive chair Nurul A’in Abdul Latif said the finding revealed that it is crucial to move beyond mere checklists and positioning board diversity as central to the strategic agenda is essential.
“For example, our findings show that 44% of directors seek a stronger connection between diversity initiatives and business results. With this report, we aspire to spark essential dialogue on the behaviours and standards that leaders should embody at the apex of organisational leadership,” she said.
Nurul A’in said that in this new era, a diverse board composition brings to the table diverse perspectives and better equipping boards to adeptly navigate emerging challenges and build trust across an organisation.
Meanwhile, PwC Malaysia said the survey outcome also suggests that some company boards continue to view sustainability through a narrower lens of regulatory compliance.
“This is driven by the lack of visibility and control over their company’s net zero plans and the accuracy of its sustainability report. In addition, there is also a noticeable lack of confidence in the board’s capabilities, particularly in overseeing GenAI and cyber security risks,” it said. — Bernama
