Megan Pantelides on the Uncomfortable 37%

What should a board change first if only 37% of directors think it is essential to creating value?

Ralph Grayson visits Board Intelligence to talk to Megan Pantelides, author of the Board Value Index, about the third edition of the research. Drawing on more than 400 non-executive directors, chief executives and finance directors across the UK, US, Middle East and, for the first time, the Nordics, it finds that 86% of directors say rigid processes and inconsistent frameworks contributed to a delayed, rushed or poor decision in the past six months.

Megan makes the case that most of this is fixable rather than evidence of a governance crisis. She explains why boards built for oversight now have to balance risk and compliance with strategy, innovation and growth, why two thirds of board packs are rated weak or poor, and how agenda planning quietly determines decision quality. The conversation arrives as updated guidance on effective board reporting from Board Intelligence and the Chartered Governance Institute shows the annual cost of board reporting has risen 177% since 2019.

• (00:00) - Welcome to The Boardroom Path
• (02:11) - One Conclusion from the Board Value Index
• (04:46) - Underperforming Boards or Unrealistic Expectations
• (08:25) - Structures Built for a Different Era
• (13:18) - The Uncomfortable 37%
• (15:12) - Fixing the Board Pack
• (18:37) - Agenda Planning and Board Time
• (20:31) - Why Executives Rate Boards More Highly
• (27:44) - Deploying AI without Losing Judgement
• (33:10) - Less Information, More Insight
• (39:39) - AI Readiness and the Pace of Governance
• (43:43) - Recommendations for Chairs and NEDs

Megan Pantelides: Megan Pantelides is a senior director at Board Intelligence, where she leads research, content, communications and brand development, and is the author of the Board Value Index. She has more than 20 years of experience across board effectiveness, executive search, private equity and strategy, including nine years at Skillcapital building boards and leadership teams for private equity backed businesses, and earlier work at L.E.K. Consulting. She joined Board Intelligence in 2018, writes and speaks regularly on board effectiveness and the use of AI in governance, and supported the Institute of Directors' commission in 2025. She holds an MA in economics from the University of Cambridge.

Ralph Grayson: Ralph Grayson is a Partner in the Board Practice at Sainty Hird & Partners, bringing extensive experience in board-level recruitment, assessment, and advisory services. With a deep understanding of the corporate governance landscape, Ralph specialises in guiding senior executives as they transition into impactful boardroom careers. His thoughtful approach, combined with a passion for developing effective leaders, enables him to facilitate insightful conversations that equip aspiring and newly appointed Non-Executive Directors with the tools they need to succeed. Through The Boardroom Path, Ralph leverages his extensive professional network and expertise to empower listeners on their journey into the boardroom.

Episode Insights:

• Efficient is not the same as effective. Boards that run to time still report rushed and poor decisions.
• The board pack is the constraint most boards can fix fastest. Two thirds are rated weak or poor, year after year.
• Boards have been staffed for oversight. Entrepreneurial, scientific and technology experience remains thin across the FTSE 350.
• Agenda planning is a governance decision. What the chair, chief executive and company secretary schedule determines what the board can influence.
• AI belongs in preparation and challenge, not in the judgement itself. Only a small minority of boards are ready to use it well.

Action Points:

1. Audit your last board pack: Take the most recent pack and mark each paper as insight or information. Count the pages that told the board something it could act on. Use the result to brief writers on what to cut.
2. Separate efficiency from effectiveness: Ask directors whether any decision in the past six months was delayed, rushed or poor. Record the cause rather than the outcome. Bring it back to the board as a standing measure.
3. Rebuild the annual agenda: Map the conversations the board must have across the year before scheduling the papers. Give strategy, innovation and growth protected time. Check the split against the balance the board says it wants.
4. Test your board's AI readiness: Establish where AI is already used in drafting and reviewing papers, including unofficially. Agree a position on human oversight, transparency, data security and accountability. Write it down before the next cycle.
5. Commission the successor conversation: Ask whether an internal chief executive successor could step in immediately. If not, agree who owns the development plan. Review progress at a named meeting rather than at the next crisis.

The Boardroom Path is the essential podcast for aspiring and newly appointed Non-Executive Directors (NEDs) navigating the journey from executive leadership to the boardroom. Hosted by Ralph Grayson, partner at Sainty Hird & Partners, each episode offers insightful conversations with industry leaders, seasoned board directors, and governance experts. Our guests share practical strategies, valuable perspectives, and actionable advice on how to effectively transition into board roles, maximise your impact, and build a rewarding NED career. 

Subscribe now, and take your first confident step along The Boardroom Path. Learn more about Sainty Hird & Partners at saintyhird.com.

The Boardroom Path is produced by Story Ninety-Four in Oxford, UK. 

Creators and Guests

Host

Ralph Grayson

Producer

Matt Eastland-Jones

Guest

Megan Pantelides

Producer

Story Ninety-Four

What is The Boardroom Path?

Welcome to The Boardroom Path, the essential podcast for aspiring and newly appointed Non-Executive Directors navigating the journey from executive leadership to the boardroom. Hosted by Ralph Grayson, partner at Sainty Hird & Partners, each episode offers insightful conversations with industry leaders, seasoned board directors, and governance experts. Our guests share practical strategies, valuable perspectives, and actionable advice on how to effectively transition into board roles, maximise your impact, and build a rewarding NED career.

Megan Pantelides: We've got data now from nearly 1,700 organisations on their board packs. About two-thirds of board packs, according to our data set, would be classified as weak or poor quality. More information does not make boards better informed.​

Ralph Grayson: Welcome to The Boardroom Path by Sainty Hird & Partners. I'm your host, Ralph Grayson, a partner in the board practice. In this series, we'll offer practical steps and useful perspectives for aspiring and newly appointed NEDs. Today, I'm back in the offices of Board Intelligence with Megan Pantelides, overlooking Cornhill and the Royal Exchange. Megan is Director of Research at Board Intelligence and one of the leading commentators on board effectiveness, governance, decision-making, organisational culture, and the use of AI in the boardroom. Megan joined me previously to discuss what makes boards effective, why the quality of board information matters, and whether governance has become too focused on compliance rather than value creation.

Since then, Board Intelligence has published the third edition of its Board Value Index. This is its most internationally extensive study yet, drawing on more than 400 NEDs, CEOs, and CFOs across the UK, US, Middle East, and for the first time, the Nordics. The findings raise some difficult questions. Only 37% of respondents believe their board is an essential tool for value creation. Only 18% say their board strongly enables innovation and some 86% report that board processes have contributed to a delayed, rushed or poor decision. Whilst only 19% have identified an internal CEO successor ready to step in immediately.

So we're going to update on the first podcast and examine some of these findings in detail. So Megan, welcome back to the Boardroom Path.

Megan Pantelides: Thank you for having me. It's good to see you again.

Ralph Grayson: Well, I've come to you for a change, so it's great to be in the City. So look, before we get into that detail if you had to reduce the Summer 2026 Board Value Index to one conclusion, what do you think it might be?

Megan Pantelides: That things move very slowly in the board world and I think it's been a year since we published the first edition. As many days as there are already, it feels like a very short time. One of the things I was conscious of is that many boards might have only met four, five, six times in that time. So, if people are responding to this research and thinking about what they might need to do differently, there's not an awful lot of time for that to see in the data. So, there's a lot going on in the outside world. Things are moving very slowly.

Ralph Grayson: So what surprised you most and did any finding particularly worry you?

Megan Pantelides: I think one of the most interesting things about the research this time around was a new question that we introduced. So previously, we've asked directors, "What are your biggest barriers to decision-making?" And we've asked them to pick two from a list or three from a list and that tells us what they think the issues are relative to each other. But what it doesn't tell us is whether any of those issues actually make a difference to board performance.

This time, we asked them to tell us if across all of those common boardroom challenges, if any of them had caused their board to delay, rush, or make a poor decision in the past six months. I was very surprised to see what we got back from that question. For every one of those dimensions, from information quality through to directors' preparation for meetings, board members' skills and expertise, across every one of those dimensions, between, I think, 78% and 86% of directors said that had happened in their boardroom, that issue had caused a rushed, a poor, or a delayed decision in the last six months and in each of those cases, again, around about half of respondents said that happened more than once. So these weren't isolated incidents. These were things that were potentially happening in every boardroom. Decisions being rushed, being made poorly, decisions being delayed altogether because of issues that were, I think, on the face of it, in large part solvable. They were not inevitable problems that were impossible to address.

So I think that was the thing that surprised me most, actually, about the research. As ever with this research, one of the powerful things about it is that these are directors telling us this. This is not our assessment looking into the boardroom from the outside. This is not what governance professionals think of boards or executives. These are the people in the room.

Ralph Grayson: There's a lot to pick apart there. So, what was the purpose of the board value index? And does the study suggest, which is a theme that we keep coming back to, are boards underperforming or are the expectations of boards just becoming increasingly unrealistic?

Megan Pantelides: I think one of the things we wanted to achieve with the research, with this index, was to cast a spotlight on something that is quite hard to see from the outside in. Are boards really delivering value? And how do directors feel about the impact that they're having? This is an anonymous survey, so I suppose what we're hoping to do is create maybe an overused phrase, a safe space for directors to say, "I'm going to put my hands up. I don't think we're doing the job that we're here to do." I think what's compounding some of the challenges that we've identified in the research, and I suppose some of the issues that we're able to put data against whereas previously we weren't, is that the external context is becoming so complex and so challenging.

As you already hinted at, I think expectations on boards are rising and I think one of the, one of the questions I'm spending a lot of time thinking about at the moment is the extent to which AI is making that easier or actually contributing to the sense of the challenge and the complexity. Because I think it's obviously introduced a whole new level of uncertainty around business models and industries and the future of work and the workforce and human capital, how we think about everything that we we build businesses on.

But I think it's also adding to questions around what can directors reasonably be expected to know and understand when they walk into a boardroom when they have access to information, knowledge is now increasingly democratised and easy to reach. Can we expect directors to be across as much information as they now have access to?

So I think that's one of the things I think is sitting underneath all of this. Let's shine a spotlight on this stuff because it's tricky and we want directors to be able to admit that their job is really hard. In large part that doesn't really happen for lots of very good reasons.

Ralph Grayson: I was trying to think as I came over, what's changed over the last 12 months from my perspective as far as doing board searches or evaluations and coaching and I think the key word that's coming up now much more than it was 12 months ago is that judgement word. And that judgement is contextual to a realisation that boards are almost living in a different paradigm now. It's as though we've had a time warp. We'll come back to the dreaded AI, I'm sure, but in terms of how it can solve for that.

But I think one of the things that's come up a lot on the podcast recently has been that all the givens and all the goalposts that we've had for the last 20 years, over the last couple of years, have shifted and what that means is the people who've been hired onto boards were there to solve for a past era, not the next era and that's not only the skills, experience, knowledge they need to be effective on the board, but it's how they use their judgement. So what for you has changed over the 12 months and where does that resonate?

Megan Pantelides: There's a caveat to the research and that it's a different group of people every time. So I suppose what I can't say is that directors feel more confident now than they did a year ago, because it could just be that we've sampled anonymously on a bunch of directors who are just fundamentally wired different and have a different worldview.

I think we are all becoming more comfortable with the concept of perma crisis and that there are many things that we can't control, and that one of the things that we need to do, whether you're on a board or in a leadership team, is roll with the punches a little bit more and be a little bit more agile and a little bit more prepared to change tack.

One of the questions that this all raises is, is the board construct fit for that environment? Is meeting four or six times a year really good enough? Is that sufficient to enable your organisation to respond to these challenges?

Ralph Grayson: So I'm going to quote from one of your colleagues Pippa Begg and I'm paraphrasing but what she said when I read some background to the Value Index is that many boards are using structures, information flows, and behaviours that have been designed for a different era. So what do you think that previous era looks like? And what instinctively do you think must replace it?

Megan Pantelides: Well, I think if we look at where boards have been and the journey that they've been on over the last 25 years or so. So obviously, post-financial crisis, there was a very valid demand for boards to do a better job from an oversight and a risk management perspective. A lot of the controls and a lot of the skillsets that were brought into boards, a lot of the processes, did a great job of dialling up the level of oversight, the level of scrutiny, the level of of attention to risk and so on that was going on in boardrooms. I think that response to that crisis I think did what was needed at the time.

I think this is always about balance, isn't it? And what I hear from directors and what I see in the research is that the balance has shifted. The space that needs to be created and maintained in the boardroom for conversations that touch on strategy, innovation, growth, value creation has diminished as the space dedicated to risk management and compliance and financial performance has grown. One of the challenges that boards have over the coming years, months probably, actually, rather than years, is to think about how they get that balance right for the age that we're living in. And I think the age that we're living in demands a much greater focus on strategy, innovation, growth than it ever has. That has lots of implications for things like how frequently boards meet, for example, or the information sets that they rely on, or the skills that they have around the table.

Just as an example, I started doing a piece of research about a year ago, actually, where I just took a snapshot view of the FTSE 350 and the backgrounds of the people sitting on those boards. And just analysing for patterns in terms of skill sets or backgrounds that people in those roles had and the vast majority of people sitting on those boards had a general management background. They've been CEOs. They've been CFOs. They've been lawyers, accountants, you know, professional services roles. Very few of them had a background in anything that looked remotely entrepreneurial or scientific or innovation or tech-focused. And I think that kind of shows we've staffed boards with skillsets that do a really important job, which is monitor performance, deliver for shareholders, that ensure that we're compliant and we're managing risk appropriately, that we're delivering against our regulatory obligations and our kind of duty to society to look after other people's money.

But what we're not doing is equipping boards to be supportive or enabling of innovation in the organisation to really push the boundaries in terms of what the organisation thinks might be possible and I think it's really about balance. I feel like boards would be well-served over the coming years, I think, to really think hard about whether they're setting themselves up to do that role, as well as they are the other one. And I don't think it's an either-or thing. This is about balance and I think that's one of the things I'm keenest to focus on in my research at the moment because I think that balance is a difficult one to strike. Boards, governance teams need practical support to help navigate that challenge because they've got to serve multiple stakeholders. The stakes are rising. The environment outside the boardroom is becoming more complex as well.

Ralph Grayson: So interesting. Do you think boards, individually and collectively, have matured in their thought process around how they add value and how they might measure that other than their self-confidence?

Megan Pantelides: One of the issues is that very few boards really engage in that conversation, are we adding value? What are we here to do? What does value add look like in the context of this board? And we've worked in many environments in which you ask individual members of the board that question and you get a whole host of different answers. And I think that's one of the, one of the problems. So it's one of the, the difficulties.

Ralph Grayson: So that brings us to one of the headlines I wrote down on the way over thinking about this. The uncomfortable 37%, as I called it. So your report says 37% of respondents regard their board as an essential tool for value creation. And nearly half believe the board performs reasonably well, but could have greater impact. And 15%, it adds little or no value if I've got all that right. So is 37% a governance crisis?

Megan Pantelides: I think there are many who would agree with you on that point. I think this research has attracted quite a lot of interest because that is quite a provocative statement. 37% of directors think their board is an essential value creation tool. What do the rest of them think? And I'm glad it raises that question.

Whether it's a governance crisis or it is a collective recognition that it's a blooming hard job being on a board. I'm glad we're asking the question, because I think it gives people a bit of a framework for having that conversation in their own boardroom. So which group would we be in? And what is it that we're here to do? And what are the things that we think are getting in our way? Do we have that balance right between strategy and growth and innovation and risk management and control? Do we have the right skills? Are we thinking about how our board evolves in the future?

The other questions we ask in that research are really all about unpacking that headline figure and I think we can see lots of signs in the research, in the data about what might be driving that. I think it would be a crisis if the things that were driving that were not solvable, but I think a lot of them are, actually. I think a lot of them stem from inherited practices. They stem from perhaps the wrong mix of skills around the table. People setting out with different views on what they're there to do and how to add value. I think a lot of that is addressable.

Ralph Grayson: So what's the practical application there? We've identified the problem, you're implying to me that needs a lot of self-evaluation and may indeed, dare I say it, a more formal and regular external board evaluation, just to shine a lens on what good looks like. But if people are trying to self-help here, what are the practical things that they should be thinking about to go from good to great?

Megan Pantelides: Well, the things I'd focus on are the things that I hear directors complain privately about. One is the board pack and the other is how they spend their time as a board. So I guess looking at the board pack first I think it's clear to most directors and governance professionals what good looks like. We've just been on a nine-month process with the Chartered Governance Institute of updating their guidance on effective board reporting. During that process, we crunched a lot of data, and we spoke to a lot of governance professionals, and every one of them could articulate to us what they thought good looked like.

The challenge is building a system that delivers it routinely. In a lot of cases, you have a governance team that are toiling late into the night, locked to the laptops, editing other peoples' papers, reformatting them, nudging people, chasing people to get the data out. Unfortunately, that effort is not always rewarded because directors generally, on the whole, think their board packs are not fit for purpose. They are battling against poor information rather than being enabled by it. To the extent that about two-thirds of board packs, according to our data set, would be classified as weak or poor quality in pretty much any given year that we look at the data actually. We've been collecting the data for eight years. We've got data now from nearly 1,700 organisations on their board packs. More information does not make boards better informed and delivering a high-quality board pack is an operational challenge for a lot of governance teams.

We're at the point now where you can write a first draft of a board paper in minutes. If you've got the source materials, the right data to put into it, your financial metrics, and your notes on what you think you want to talk about, and you've got a bit of a brief from the governance professional running the process, or your board as to what they want to talk about, you can click a button and have a good board paper in a few seconds.

So I think there are tools that are going to help us to put that good practice, that sense of what good looks like into practice, much more robustly and rigorously than ever before. I add a big caveat to that, which is not every AI tool can do that well, and you need to know exactly what you're asking it to do and how to get it to give you a good answer. Because what boards cannot afford is to use AI to increase the volume of information that they have to engage with before meetings or turn that information into AI slop, right? I think they already struggle with board packs because they're too backward-looking, they're hard to read, they're too dense, too full of data, poorly written, read like they've been written by five different people, so the voice is changing all the time, format's moving around. All that sort of stuff can be made a lot easier with AI. But it's not a panacea if it's just used blindly and without that kind of really thorough grounding in what good looks like.

But I'd say, yeah, information quality is something that is fixable and we know it is because we've worked with clients on this for 20 years. You put a system of interventions in place and you can transform the quality of your board packs that your board is properly equipped with the information it needs walking into the boardroom. They're using their prep time to engage with the issues, not to wade through data, trying to figure out what the point of it all is. There is a way of defining what good looks like. We've written guidance on it with the CGI. It's available now. We know what works, templates, training, proper briefs, all that sort of stuff make a huge difference to board pack quality.

The other point around agenda planning, how boards use their time. Again, that's a common complaint that I hear from directors, we spend too much time looking backwards and not enough time looking forward and it plays into this issue around boards being sufficiently focused and geared up to deal with innovation strategy and growth. When we see organisations really engaging with that problem, you have the chair, the CEO, and the COSEC spending time every six to 12 months really thinking hard about what their forward calendar needs to look like. What are the big conversations that need to happen in our boardroom? What are the big decisions we need to make? And thinking about that in a really structured ways. We've developed models and frameworks that can help with this, six conversations model for example, that help you pinpoint what those conversations are and then work in a structured way to map them out in your calendar so that you are protecting time for those big conversations and you're fitting everything else that needs to happen in the boardroom around it.

I think what happens in practice is that people start with the last agenda, and they just roll it forward and change a few things. They start every meeting with the procedural and the performance monitoring elements of what the board's there to do and they leave all the big strategic knotty questions for the second half of the meeting when everyone's energy has been used up and they're running on caffeine. Not the best foundation for a really high-quality discussion, especially around questions that are hard to answer.

In many respects there's just so much complexity. It's really hard for governance teams to manage all the interdependencies between different forums and governance structures and entities and managing all the regulatory requirements and we have to just discuss this at this time of the year. I think there's just a lot of complexity to it as well. So I think they need probably more support than people realise to manage all of that.

Two things that I think are really fixable. The key thing here is that you need the COSEC, the chair in particular working in tandem. It's not something that the COSEC can fix alone.

Ralph Grayson: And what about the chair-CEO relationship and the board and the executive team? One of the things I found very interesting in the report is that executives seem more positive than the NEDs do. So again, if I've got it right, 43% of CEOs and CFOs regard the board as essential compared with only 33% of NEDs. So why do you think management might have a more positive view of the board than the NEDs do of themselves in that respect?

Megan Pantelides: I think it's possibly because they're more in control of the conversation, in a sense. They're able to ask the board questions and get answers to them and if the board is able to answer those questions or to help them think through the answers to those questions, then I think you're going to feel like you're getting value from the exchange.

I suspect a lot of directors probably feel a little bit carried along by the corporate cycle and what's expected of them and they don't necessarily have a lot of ownership or agency in terms of shaping what the board actually talks about. I'm speculating, but I think that might be part of it. The irony is not lost on me that our board meeting is going on in the room next door at the moment and when I speak to our exec team about what value they get from the board meeting, I think it is exactly that. It is this is a forum for us to ask for advice and to get input from a group of people who have a very different knowledge and experience set to our own, very different frames of reference and ways of looking at the world, and to get them to engage with the questions that we're asking ourselves on a daily, weekly, monthly basis.

That's achieved in practice when the process of collaborating on the board agenda is a collaborative one, actually. It's not something that happens in someone else's office and you get sent it and you turn up and go through the motions. It is a really collaborative exercise. It says, "What are the things that we really need to talk about in this board meeting versus the next one in two months' time?"

Ralph Grayson: Brings to my perennial question. What does board leadership look like? Do you think in terms of defining the role, do you think board members have matured or thinking has matured around what does board leadership look like and how can the board lead, the old noses in fingers out, over executive behaviour of board members?

Megan Pantelides: I think it probably has and I think it comes back to that point you made earlier about judgement because I think board members are becoming more cognizant of the need to exercise judgement. There's more academic work being done on this, your own included, that really raises the question as to what the board is there to do and the board is there ultimately to exercise judgement to help the executive team make the right decisions, to help ensure that the team have the right sort of parameters and guiding principles to deliver what the organisation exists to deliver. And I think the reality is that there's so much to be done in the boardroom that many directors, are cognizant of the need to get the balance right. Having said that, I think when people do get too into the weeds, that is a contributing factor to the sense that you're overstretched and don't have enough time to do things. So probably two, two sides of a coin there.

Ralph Grayson: Clearly the role has become a lot more onerous in terms of the personal visibility. I think certainly from my perspective chairs have become as visible as CEOs these days and success and failure are increasingly equally weighted between the chair. BP is classic example, right? So if we look at this efficiency in that respect, and you've touched on a number of different ways in which a board can be more efficient.

Again, the board findings, 89% of respondents regard their board processes and meetings as efficient, yet 86% say they have overly rigid or inconsistent processes, which, and I think you touched on this, of course, delayed, rushed or poor decisions in the previous six months. So how can a board be efficient? And the million dollar question, how can they still make poor decisions?

Megan Pantelides: That's a really good question. I suspect one of the things that underlies that sense that boards are operating efficiently is that there isn't a lot of slack or downtime in what boards do, right? They are trying to eke as much value out of every interaction that they can. I also think that they probably don't see the half of what goes on behind the scenes in terms of supporting the board and delivering the board cycle, right? So they don't see those late nights that the governance team are pulling to try and get the board packs in the right format, out on time. They don't see the work that the management team are doing draft after draft of the board paper as it goes up and down the chain. That's possibly something to kind of flag about that figure. I think it's probably slightly inflated and I think, if you ask different people you might get a slightly different answer.

Ralph Grayson: Well, and to that point, sorry to jump in, but it's been fascinating in the last few podcasts. Those and some people you know well in the stewardship world are still fixated about the issue of board packs and the board process being a box ticking exercise rather than a focus on outcomes. What's the value index tell you or your conversations around this? Where's your head on this?

Megan Pantelides: Yeah, well, I think one of the factors that contributes to the vast time and resource that goes into writing board papers and the growing volume of information that directors are expected to engage with every board cycle is a cover my backside sort of mentality. Which comes from a very sensible place. It's a very rational response to the situation we're in where boards are raked over the coals for not having known certain things. Well, include it. Give them everything they could possibly need to know, and then no one's going to get in trouble.

Ralph Grayson: So sorry, is that the mindset or is that a process practical application?

Megan Pantelides: I think it's a bit of both. I think it's a bit of both. I think in an ideal world, there would be sufficient intellectual and psychological safety within organisations to be able to choose exactly what you think the board needs to see, and to give them all the bad stuff, as well as the good stuff, in a really open and transparent way, because you know that they want to engage with it in the right way. When things go wrong, I think there's a fear that will come back to bite you.

But I think it is also a bit of process because I think the reality is that we have lots of information at our fingertips. We have limited time, because we're trying to do our day jobs and run the business. But I also think there's a lack of training and awareness within teams as to what the board really needs, and there's a lack of a conversation about what the board really needs and I think in a lot of cases, the governance team doesn't feel empowered or supported to really push back on that or to put the steps in place that they know will make a difference to that and to fill that gap in terms of knowledge and expectations. So I think it's both.

Ralph Grayson: So going back to the goalposts have moved in terms of that clarity of what are we here for in today's world rather than yesterday's world. Is there a way that AI or is there a way that Board Intelligence can help board members and boards as a living organism think about that?

Megan Pantelides: Yeah, absolutely. I mean, this has been the question that has consumed so much of our time and energy over the last few months because we want to deploy AI responsibly for boards and governance teams and we want to deploy AI in a way that actually makes their lives easier and outcomes better. I think the temptation with so much of the innovation that's happening around AI is just to focus on finding ways to shortcut things and make things quicker and easier. But I think what we can't risk in boardrooms is shutting off our critical thinking muscle and giving up all responsibility for exercising judgement to AI, right? Nobody wants that.

Ralph Grayson: And to the critical thinking point, can't miss a plug here, you co-wrote a book with some of your colleagues here on critical thinking. It's a must read it if you're interested in governance. Sorry, governance geek in me coming out.

Megan Pantelides: Thank you for the plug, Collective Intelligence. Critical thinking is so fundamental to the point that Jen Sundberg, who co-founded Board Intelligence, has now set up a holiday camp for kids to help them think critically. It's such an essential life skill and we're not equipping people with it early enough and I think in the boardroom, it's become even more important. So I think everything we're trying to do at Board Intelligence is about supporting directors to exercise their critical thinking muscle to apply their judgement . That is fundamentally what they're there to do. They bring their unique perspectives, their unique ways of thinking about things and dissecting problems, their unique knowledge and frames of reference, and they pull them all together to come to a decision about something, or to analyse a problem, or work out a solution.

We're all going on our own personal journeys with AI, right? We all have our tools that we use and I think I'm probably quite typical in that I engage with AI tools that I have at my disposal very differently to the way I did a year ago. A year ago, it was like, "Brilliant, this can do all this stuff super fast for me." But then you start to think, "I'm not sure I really trust it, and I don't think I'm giving it the right prompts." I use it as much now as a critical thinking partner as a do things faster partner and I think the same is true in boardrooms.

So we've launched a new tool a couple of months ago, which essentially allows directors in the meeting prep phase, it's not a tool that sits in the boardroom and intervenes during discussions, but it sits within their board portal and allows them to engage with a really wide range of alternative perspectives on topics. So if you're looking at a paper on sustainability, for example, you're not a sustainability expert. What's the latest thinking on this? I need to ask some questions to understand these topics and what are the questions it's asking in more detail, these terms, these scenarios this regulatory context, et cetera. It allows you to go really deep into that subject matter expertise and engage in a kind of self-propagated kind of inquiry process before you've even walked into the room.

So the idea is that you walk into the room better equipped to contribute to that discussion. It also, references your past pack history and your organisation's internal kind of knowledge bank or strategy documents, et cetera, to help you ask questions about the information you've been presented. For example, have we fully considered the impact of this on all of our stakeholders? Are we making any assumptions in this paper that need to be tested further? Have we thought about all the different scenarios that might play out here? You've kind of got a whole team of people sitting around you.

Ralph Grayson: Is there a danger of data overload here? Writing data on top of data on top of data, which doesn't solve for good judgement, does it? Or maybe it does.

Megan Pantelides: So I think what it enables directors to do is to use their meeting prep time, not to wade through documents and try and work out whether this data point here aligns with this data point over here, or this assumption does that contradict any of the other assumptions we've made elsewhere? They don't have to do that kind of work. What they're doing is really thinking through the questions that are being asked of them by management.

I think there is a risk that directors can feel slightly overwhelmed by the range of sources of information out there. But I think doing it in a sort of curated way that's anchored to the board pack and the company's kind of institutional knowledge and aligned to the things that we know boards need to engage with the topics that are coming up most frequently. Individual directors tend to be less well-equipped, because you can't have an expert on all of these things around every board table, right? It would be a United Nations kind of council that was never able to make a decision. So it's just about trying to amplify that sort of preparation process and make sure that they can walk into the boardroom engaged in the discussion, already thinking through second, third, fourth order implications, and ask the right questions so that the board can reach a better outcome.

I suppose it's about supercharging what the directors bring to the room rather than shortcutting it or replacing it. As we stand today, it is the duty of a director to exercise independent judgement I think the challenge that we have at the moment is that because they get so much information, they have limited time, I'm not sure they're doing that as well as they might actually. So I don't think we're starting from a perfect place and it's going to get worse. I think we're starting from quite a low base and this stands to help improve it.

Ralph Grayson: Did one of your earlier reports, I've highlighted a quote, "Less information, more insight." How does a board member get that balance right? Is that down to the company secretary? Is it down to the chair talking to the CEO? How do we optimise it?

Megan Pantelides: Getting out of the habit of sharing information for information's sake and sharing insight is absolutely crucial to fixing this board information problem because I think that is the crux of it really. One of the most valuable aspects of the board reporting process is actually the opportunity it gives management to sit back, think, and engage with what's going on in their function or their business in a critical way. When management do that, when they're writing a board paper, when they give themselves a kind of structured framework for thinking through the questions, when they have a good steer from the board of what the board is interested in, then I think what you get in the board paper is much more likely to offer insight than just information. I think one of the most useful things that comes from writing a good board paper is the opportunity for reflection that it gives management.

Ralph Grayson: So how does a good board paper improve board behaviour and help the chair create that safe space in which people dare ask the provocative question?

Megan Pantelides: We know it definitely does. So I think in our the research that we've just done with the CGI some quite interesting stats about the impact of board reporting to support what we've covered in the Board Value Index as well. So I think 42% of the people we surveyed in that poll said that they thought their board materials were limiting their board's effectiveness. So I think there is an understanding that there is a direct link between board paper quality and board outcomes.

When you look at an individual board pack or a board paper when it's done well. So first thing it does is it orients the board with a really good understanding of where the organisation is or where it's heading. I think it then guides the directors to engage their brains around the topics that are going to make the biggest difference to changing that trajectory and achieving those goals. So the board aren't left trying to figure out what the big questions are. They're not left trying to figure out what's really going on with performance. They walk into that room with a really clear understanding of where the organisation's at, a shared understanding of where it's going and what the issues are that they need to engage with and a really clear set of questions for them to grapple with in the meeting. It's really clear what the expectation is from management as to what they're going to talk about and what they're going to decide, what input and advice they're going to give back. So I think that's the first thing.

I think the other characteristic of a great board paper or great board pack is that it is candid. So that picture of where the organisation's at and where it's heading is not a rose-tinted spectacles view it is the warts and all view. Because actually, sometimes the board's advice is best directed towards, "Okay, we're doing really well here. How can we do more of this?" But equally it can be, "What's the thing coming down the track that I'm not thinking about that I need to be thinking about?" Both of those conversations add value, but if you've only got a board pack that tells you everything's fine, thank you very much for asking. I'd like my pat on the back and I'd like to get out of here as quickly as possible, then you're not going to get the advice that you need. And we all know boards hate surprises. and it will show up as a surprise in the data and the narrative sometime later, which does nothing for your kind of credibility as an individual reporting into the board.

So I think those are the main impacts that we see, certainly.

Ralph Grayson: So when boards have had the wisdom to have this super-duper board intelligent sufficient process, does that change the nature of the skills, experience, knowledge of the individual NED? Are we moving away from the generalist NED? Are we still having a T-shaped NED? What does the human look like once the board has implemented the Board Intelligence process?

Megan Pantelides: I think it probably supports the case for more generalists, actually.

Ralph Grayson: I think what's interesting is when we are coaching NEDs as opposed to executives, there is this lack of clarity in many NED's minds as to what do I now solve for? I used to know what I solved for on a board, and therefore I knew the roles I was going to go for and the types of boards I want to be on and whether that's technical skill, sector experience, or board behaviour, I think there's less clarity and the more confusion if that's not an oxymoron. I just wonder what your experience with this is?

Megan Pantelides: I guess even generalists, they have spikes in particular areas, right? And I think you still need that blend. You're never going to find five people that look and sound exactly the same, right? And I think you should always be looking to think in a structured way around kind of what skills, where your organisation's heading, the challenges it's going to face, and skills that are best suited to tackling that. To engage with AI tools, to engage with the information that management are giving you, a level of knowledge is required. We've not completely democratised access to all knowledge, right? You still need to be able to sense check and understand the answers that you're getting from the tools and the information that you're being served.

I think the bar is being raised in terms of expectations of directors. It continues to be raised. I think this is something we've all seen over the last however many years. Expectations are raised the range of things you're having to engage with as a board is expanding. I think the reality is you can't solve for every topic or decision by bringing specialists onto the board. There isn't enough space for them. Build pop-up boards or whatever it is that you need to do to bring that kind of expertise in as and when you need it. Engage with tooling, bring in outside perspectives. But I don't think you can solve your way to dealing with all these big challenges, fixing all the problems that your organisation may face by bringing specialists in.

But it puts the onus on the individual to be really clear about what it is that they bring and everyone does bring something unique. But I don't think it makes it easier to get onto boards. If anything it probably makes it harder, and maybe that's right. Maybe in this age what we need people to be doing is really thinking hard about whether they can add value and how they add value.

Ralph Grayson: And at what point do we replace a human with a bot?

Megan Pantelides: Well, that's the million dollar question, isn't it? I can't see that happening anytime soon. I mean, there certainly are organisations that have put AI tools into roles with decision-making agency. We've seen it in investment committees in the Middle East and so on. I can't see it happening in the UK anytime soon. Not least because our regulatory context just doesn't allow for it, right?

Ralph Grayson: So I'm going to throw some of your own data at you.

Megan Pantelides: Yeah. Go for it.

Ralph Grayson: So 84% of boards have engaged with the question of human-led versus AI-led decision-making. Only 49% are actively moving from discussion into review or implementation. Board Intelligence's separate readiness analysis found that only 11% of boards meet even a relatively conservative AI readiness threshold.

So are we discussing AI because it's genuinely on the agenda? Or is it because directors think or know it ought to be or they ought to be seen and heard to be talking about it?

Megan Pantelides: The interesting thing about that data point, the first data point, is that it shows that the conversation about AI is evolving from being "What is AI and how do we use it? How's this going to disrupt our business model? What governance frameworks do we need to put in place to make sure that this is deployed responsibly in our organisation, et cetera." It's moved from that to "What extent are we happy with AI making decisions? And which decisions do we think AI can make versus which decisions need to remain kind of human-led?" And that's exactly the kind of question that we asked if boards were engaging with.

I don't think this suggests that boards have fundamentally changed how they operate to meet the challenges of an AI-enabled world. I think that the readiness radar data shows that the processes and the practices around governance are moving much more slowly than the conversation around AI is moving. And I think that sort of sits at the heart of quite a lot of what we talked about today. I think the outside world is moving at one pace, and boards are moving at another pace and I think that's where there's a bit of a gap forming.

We know that AI has this immense capability and in lots of parts of the world it's moving way faster than we hear in the UK can imagine, I think, at the moment. Certainly those who are developing the technology at the kind of pioneering edge of things have very big and bold ideas about what AI can do. Board practices are not likely to keep up with that pace.

One other interesting observation from this research was that the extent to which boards themselves are thinking about how their own role and how they work might change. The takeaway was that too few boards anticipate the sort of change that I think is necessary to rise to that challenge and to ensure that we're harnessing AI rather than being led by it.

Ralph Grayson: Surely the answer to this is that the pace of change means that the regularity, quarterly nature of board meetings is no longer fit for purpose. So do you think that is the trend and how can AI be the bridge between those quarterly board meetings?

Megan Pantelides: I don't know whether AI needs to be the bridge between those quarterly board meetings. I think boards are finding ways to get together more frequently and in more of a bite-sized form. I don't think anyone's really solved this yet and I suspect everything that we've seen has been experimentation rather than a marked shift and a kind of trend that people are following. I think people are still trying to get their heads around it, to be honest.

What we are likely to see is that those organisations already have a relatively slow moving board cycle. Unless the rest of their organisation is moving like a sports car, and for some reason, the board operates at a more of an oil tanker pace. Unless that's the case, they're going to find themselves behind. If you think about a board that meets 10 times a year, they're just pooling their expertise and their insight much more frequently. They're looking at decisions and revisiting them much more frequently. They have their finger on the pulse in a way that it's just impossible to do when you turn up once a quarter having read a 400-page board pack that was produced six weeks ago. The reality is that we'll just start to see organisations move at very different paces.

Ralph Grayson: Let's just try and pull this together then. So a couple of recommendations for either chairs or NEDs when you put the pen down figuratively on this year's report.

Megan Pantelides: Inviting the board to explore where the board might need to go and how it might need to evolve to meet these challenges, I think is a good idea. I know there's an awful lot of subjects competing for space in a board agenda. But this is precisely the sort of thing that you should be talking about at a strategy day or off the back of a board effectiveness review or something. Everyone around the table will have a perspective on this. Management will have a perspective on this. There'll be lots of people that you can ask for advice and support and ideas to help challenge your own thinking on this. But I think you've got to start with what your own board thinks. How do we think our role is going to change? Will it change? Do we need it to change? I think that is a conversation that I'd love to see boards having. That's the key thing I'd recommend boards do and then fix your board pack.

Ralph Grayson: So look, I think we've ascertained that this year's Board Value Index raises a number of fundamental questions to my mind, not simply whether boards are compliant, busy, or efficiently administered, but whether they improve the quality of the organisation's thinking and its most consequential decisions.

There still seems to be a considerable gap to my mind between the potential of the board and the contribution that many boards currently make and closing that gap will require Board Intelligence to step in to provide better information and processes but in particular to Megan's point, better preparation, clearer role definitions, adaptability, and that new magic word, judgement

So thank you, Megan, for those insights and I look forward to the next episode of the Board Value Index. Where do people find this year's reports? How do they follow you? How do they keep up to date with what Board Intelligence are writing and talking about?

Megan Pantelides: Well, yeah. Thank you, Ralph. So go to our website. The report's available to download there under the resources section. Follow me on LinkedIn. There aren't many Megan Pantelides on there, so you should be able to find me. But also I recommend signing up to our newsletter. So Board Intelligence has a weekly newsletter called What Matters on Monday and that's where we share all of our research insights first. I would also recommend when it comes out soon, going and downloading the Effective Board Reporting Guidance from the CGI website, because that is a treasure trove of advice on everything I've talked about relating to board packs.

Ralph Grayson: Of which I can see the new episode, which hasn't been released yet sitting in front of me. Megan, thank you. As always, insightful and hugely relevant.

Megan Pantelides: Thank you.

Ralph Grayson: I hope that you've enjoyed listening to this podcast and have found it helpful when thinking about how to approach your own path to the boardroom. If you would like to push this a little bit further, Sainty Hird runs a bespoke one to one programme designed specifically to this end. For more information, please visit our website saintyhird.com, follow us on LinkedIn, and subscribe to the Boardroom Path to receive new episodes. Thank you for listening.