What FTSE 100 board review disclosures reveal about board performance

We are at a unique moment of potential and uncertainty. Rapid technological change and shifting geopolitics mean that businesses cannot plan for a steady state world, if ever they really could.

This has important implications for the role of the board. Traditionally, boards have been primarily concerned with ‘safe operation’: ensuring management keeps within the guardrails of regulation. We’re sensing rising frustration with this approach — not just from directors and management, but investors too. At the same time, we’re seeing both directors and their stakeholders place greater emphasis on the board’s role in ‘value creation’: guiding and supporting management to venture faster, further, and in the right direction.

Against this backdrop, and with the Board Intelligence 2025 Board Value Index finding that nearly a third of boards aren’t adding any value to their organisation, we wanted to take a closer look at what’s going on in the UK’s boardrooms.

What does the research cover?

Board evaluations are an important component of good corporate governance and a vital tool for improving board effectiveness. Formal and systematic, they help surface unspoken or unseen weaknesses and offer practical recommendations to address them.

They are also highly sensitive, seen in detail only by a select few. But that doesn’t mean we can’t use what is in the public domain (namely, the annual report disclosures required of listed companies by the UK Corporate Governance Code) to draw some conclusions about what boards are struggling with and where they are focusing their development efforts.

Our research is based on that publicly available information: the 98 board evaluation statements published by FTSE 100 companies in their 2023-2024 annual reports. We focused on the board’s action or development areas. Every time we found a reference in these statements to a specific board development action, we categorised it into one of 12 buckets to see if we could spot any themes.

The 12 buckets, which cover the key factors shaping board operations and performance, are components of BI’s 5 I’s of board effectiveness:

Individuals:

1. Culture: How does the board work together? Are all voices heard?
2. Leadership: Is the board well-run? Is there a clear, considered succession plan?
3. Members: Who sits on the board and what value do they bring? What gaps are there and how can they be filled?

Infrastructure:

1. Committees: Are committees used effectively, and do they create space for the main board to look at the big picture?
2. Decision-making: Do decisions have clear owners, timelines, and execution and review plans? Is the decision-making process effective and timely?
3. Meetings & agendas: Do board meetings make best use of time? Does the agenda reflect the most material issues facing the business?

Impact:

1. Mandate & focus: Does the board strike the right balance between its steering and supervising roles? Is everyone clear on the board’s role versus other forums? What is the board’s role in strategy?
2. Strategy & risk appetite: Do board meetings make best use of time? Does the agenda reflect the most material issues facing the business?

Innovation:

1. Innovation: How does the board support innovation in the business? Does it measure, target or incentivise innovation? Does the board effectively harness emerging technologies to enhance its insight and oversight?
2. External views: How well does the board understand and respond to the evolving external landscape?

Overall, we found 589 references to areas in which evaluators found opportunities for improving board processes, operations, or performance — on average, 6 per company.

What did we find out about FTSE 100 board development?

Board evaluation disclosures reflect how the board sees itself and how management sees it, but more specifically what the company chooses to disclose of that view. They don’t necessarily give a complete picture of where board performance actually needs to improve.

This is not to suggest deception, only a tendency to soften the edges. Nonetheless, board evaluations give a strong indication of where improvements can be made and where boards are focusing their development activity. Our research reveals the top three areas of focus are:

1. Meetings & agendas
2. Mandate & focus
3. Leadership

Let’s unpack each of these in turn.

Board meetings & agendas

The most common area cited for improvement among the FTSE 100 companies we analysed is board meetings, with 116 references (equivalent to 20% of all development areas flagged by reviewers). These references largely pointed at dissatisfaction with board meeting agenda planning and discipline, and the breakdown below reveals a clear message: boards want their conversations to be more strategic and less operational. Overall, 69% of FTSE 100 boards reported a development area relating to board or committee agenda planning and discipline. 

Board mandate & focus

This sentiment is echoed in the second most identified board development area — the board’s mandate and focus — which was mentioned 100 times. Here, board evaluation disclosures surfaced a range of challenges, including:

• The extent to which the board’s mandate and priorities are clear and widely understood within the organisation.
• The board’s understanding of the organisation and the extent to which that enables the board to engage effectively with strategy and risk.
• How directors engage with stakeholders to deepen that understanding.
• The board’s role in setting strategy and setting a risk appetite that enables successful strategy execution.

Our experience suggests that a lack of clarity or alignment around the board's purpose and priorities makes it much harder for the board to plan and deliver an effective meeting agenda or annual calendar. This issue may therefore lie at the heart of the agenda planning and discipline concerns widely flagged as development areas by both FTSE 100 boards and their reviewers.   

Leadership

The third most common development area was leadership, with 91 mentions. Here, succession — a classic board challenge — was the major theme.

We also found many references to board upskilling needs, with a notable gap in knowledge and insight on emerging technology trends, AI, and sustainability. Overall, training was mentioned 70 times.

These development areas link directly to the central question that prompted our research: are boards set up to deliver their ‘safe operation’ and ‘value creation’ roles? It seems the FTSE 100’s board reviewers aren’t convinced.

More surprising, however, was what wasn’t there. Innovation, so critical for long-term value creation, wasn’t mentioned once in the FTSE 100’s board evaluation disclosures.

Is innovation a board blind spot?

First attempts at research usually come with limitations, and this is no exception. If an area of board performance isn’t mentioned, it could mean the board isn’t thinking about it, or that they thought about it and saw only a strength. 

It’s something we’d like to investigate more in future research, but for now there’s good reason to think that innovation is indeed a blind spot.

Innovation is a common theme in annual reports and corporate websites, framed in language of current capabilities and future opportunities. It’s also something you can always do better, even if you’re already good at it. In that context, it would be surprising if its absence from board evaluation disclosures was because boards were completely satisfied with their organisation’s innovation capabilities and performance.

It strikes us as much more likely that innovation is absent from board evaluation disclosures because board evaluations don’t routinely consider it. A quick scan of the published methodologies of leading board reviewers, and guidelines on board roles and director competencies, would support that conclusion. 

How is innovation the board’s business? 

The board does not — and should not — direct innovation in an organisation, but good governance is an enabler of innovation. The board sets the tone. It chooses the company’s leaders, defines their success criteria, and every interaction signals to management what they and the organisation’s stakeholders expect of them.

A board that is set up to support and enable innovation will ask management questions about how the company is innovating and building its innovation capacity. It may align incentives with innovation targets. It will signal to management that it accepts and expects a degree of risk to enable the long-term growth that innovation can bring and makes clear what is within and outside that risk tolerance. It monitors the right metrics, at the right time, to enable rapid, data-driven experimentation and make the right calls about when to stop or scale new ideas.

A board that is not set up to support innovation can have the reverse effect. The board may go beyond not encouraging it; it can undermine innovation by signalling that it is neither a priority, nor — in the most extreme cases — desirable.

What are the implications for boards and governance teams? 

Altogether, FTSE 100 board evaluation disclosures reflect what we hear anecdotally: that boards want to lean into their value creation role. However, they don’t yet seem to be concerning themselves with innovation — the organisational capability that is most likely to create sustainable, long-term value.

This is a gap to be filled. In an age of frantic, technology-driven change, it is no longer safe not to innovate, evolve, or grow. That’s why innovation is one of five areas that Board Intelligence focuses on in board effectiveness reviews. When preparing for your next board evaluation, whether internal or external, it’s worth considering whether this is something you can address.

There’s no doubt that there is a balance to be struck between safe operation and value creation. Board members need to do what they can both to avoid crashing and to make the car go faster, without ever sitting in the driver’s seat.

They can better judge how to get that balance right if they better understand the risks and opportunities facing the business in this changing world. This is the reason why board development and director upskilling are so important.

It is also important that, if boards do see value creation as central to their mandate, they define what it means for them. For some, value creation could mean short-term shareholder return; for others it could factor in the long-term impact of the company’s activities on its license to operate, its resilience to external shocks, or its ability to attract and retain talent.

The latter is a wiser view, but in all cases value creation is really about how the business changes, to become better in some sense than it was before, which is ultimately the only way to survive. So, while it is a board’s prerogative not to make value creation a part of its mandate, it cannot ignore it.