Corporate directors aren’t sure NAFTA can be renegotiated: survey
A report from the Institute of Corporate Directors found fewer than half of the Canadian board directors surveyed were confident in a successful NAFTA renegotiation, but it may not be all bad
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TORONTO—A survey by the Institute of Corporate Directors (ICD) found that 76 per cent of board directors in Canada believe the country’s international trade can thrive outside of NAFTA.
Fewer than half said they were confident the agreement can be successfully renegotiated. The survey also shows that directors are confident in the Canadian economy and in the prospects for their own sectors.
The Director Lens survey, conducted by Environics Research between Sept. 29 and Oct. 23, 2017, finds that among Canadian board directors:
• 75 per cent feel the Canadian economy will improve or remain the same;
• 79 per cent feel the economic sectors of their boards will improve or remain the same;
• 61 per cent plan to increase capital spending in 2018;
• 40 per cent expect to grow R&D spending in 2018;
• 75 per cent expect to raise or maintain staffing levels over the next five to 10 years.
“There is obviously enormous value in NAFTA, but directors also see opportunities beyond the agreement,” says Rahul Bhardwaj, President and CEO of ICD. “The strong majority of our members are bullish on the economy and are expecting to invest in the future of their firms.”
Human capital issues are top of mind
The ICD survey also shows that societal issues, particularly related to human capital and the workforce, have begun to influence boardroom discussions. Directors say the issues most commonly discussed relate to workforce integration of new Canadians, increasing the involvement of Indigenous peoples, the impact of an aging population, and access to healthcare and mental healthcare. Over half of directors have considered or have developed a strategy regarding racial and cultural diversity as well as for gender inequality.
However, climate change has yet to make an impression on many directors. One-third of board directors have factored climate change into their strategy, but half of respondents do not see climate change as an important challenge facing their boards.
“It’s very positive to see that discussions about human capital, fairness and equality have been elevated to the boardroom, and that directors are connecting the dots between social and business challenges,” says Bhardwaj. “However, directors may need to drill down further on certain issues, especially on climate change and relate these to the future of their businesses.”
The Institute of Corporate Directors (ICD) is a not-for-profit, member-based association representing Canadian directors and boards across the for-profit, not-for-profit, and Crown sectors.