In its Director 360° global survey, Deloitte highlights the latest issues, challenges and opportunities the boards face around the world and how Luxembourg compares to the global trends. The analysis is the outcome of extensive interviews with 317 directors (10% from Luxembourg) in public and private companies across 15 countries whose views were solicited on a variety of corporate governance matters, ranging from board composition and risk oversight to the director’s role in strategy. In addition, this year the survey expanded to include topics such as macroeconomic regulatory issues and its associated perceptions, cybersecurity, internal audit compliance and anti-corruption – among others.

The Deloitte Director 360° Global Survey’s main findings:

• Shareholder engagement

Nearly 75% of Luxembourg respondents expect the level of interaction between shareholders and boards to increase over the next few years, but interestingly the same proportion of the Luxembourg boards concerned (75%) do not yet have a shareholder engagement policy in place – compared to 61% globally.

• Diversity

The Deloitte survey finds that nearly three quarters of the Luxembourg boards questioned have not introduced diversity policies for board composition. On this point they are lagging behind the global average (74% Luxembourg vs. 63% Global).

• Term limits not a widespread practice in Luxembourg boards

Luxembourg boards are in line with the responding boards globally when appearing to implement term limits for director service almost twice as frequently as age limits.
One obstacle to greater diversity could be the long tenure of incumbent directors and the lack of term or age limits on board service. Only 33% of Luxembourg’s boards that have been interviewed in this year’s Deloitte’s Director 360° survey use age or term limits for its directors.

• Independent Directors in Boards 

87% of the Luxembourg respondents pointed out that the boards they serve on have at least one independent director, i.e. directors who are not engaged in business or family mandates whose interests might impair their judgment on board issues. Respondents, however, stated that the number of mandates an independent director takes should not be limited.

• The main topics on agendas of Boards in Luxembourg in the next 12 months

From a Luxembourg perspective, regulation, governance and compliance will remain the top boardroom issue for directors (77 %) in the next 12 to 24 months, while only 27% of the boards globally regard it as an important issue for the coming year.

According to Justin Griffiths, Partner at Deloitte Luxembourg: “A large proportion of Luxembourg’s businesses are in the financial sector and are subject to increased regulatory scrutiny and new regulations. This may explain why regulation, governance and compliance are higher on the agenda than for instance strategy.”

In Luxembourg, the second highest boardroom focus area will be risk management, which received a significant higher focus from Luxembourg respondents in comparison to global respondents (48% Luxembourg vs. 23 % Global).

“Besides regulatory/compliance risks, boards should also focus on other key enterprise risks such as strategic or cybersecurity risks for instance. Boards should ensure that appropriate sensor and monitoring capabilities have been developed to timely capture key emerging risk exposures on their radar screen and therefore be able to exercise effective oversight” indicates Laurent Berliner, Partner at Deloitte Luxembourg.

Only 29% of the surveyed directors in Luxembourg see strategy as a pressing boardroom item, whereas 55% of the directors globally regarded it as a pressing issue.

The findings of the survey were presented in front of over 70 participants at a Global Corporate Governance Conference on June 26 organised by Deloitte Luxembourg in association with ILA. During the event, Carine Feipel, independent director, attorney-at-law and member of the ILA Insurance committee, Robert Dennewald, CEO of Eurobéton and President of Fedil, Raymond Schadeck, independent director and chairman of the ILA Education Committee and Henry Kelly, Managing Director of a consultancy firm and Chairman of the ALFI Fund Governance Forum participated in a panel discussion on the impacts of global corporate governance on the Luxembourg market.

The complete version of the survey’s findings and more information on corporate governance are available on our new corporate governance website: www.corpgov.deloitte.lu (direct link to the study: www.deloitte.com/lu/director-360-global-survey).