In this episode of On Boards, co-hosts Joe Ayoub and Raza Shaikh welcome Ray Garcia, senior partner at PwC and leader of PwC’s Governance Insights Center, to discuss findings from its 2026 Annual Corporate Directors Survey. Drawing on responses from more than 600 corporate directors, Garcia explores how boards can improve their effectiveness, strengthen strategic oversight and adapt to a rapidly changing business environment.

The conversation examines board assessments, cybersecurity and AI governance, the quality of information directors receive from management, and the need for more deliberate board succession planning. 

Garcia emphasizes that effective boards must look beyond current performance and technical expertise to anticipate future needs, prioritize cultural fit and build the capabilities required to support their company’s strategy.

Key takeaways

• Board assessments should focus on future performance, not just past performance

• • Assessments are often treated as an annual governance exercise rather than a tool for improving board effectiveness

• • Bringing in an experienced third party to conduct individual interviews every few years can encourage greater candor and uncover issues that surveys alone may miss

• • Assessments should consider where the company expects to be in two to three years and whether the board has the capabilities to support that strategy

• Cybersecurity is an enterprise resilience issue, not just a technical one

• • AI increases cyber risk as both companies and threat actors use the technology to strengthen their capabilities

• • Boards should conduct tabletop exercises to prepare for potential ransomware attacks and data breaches, clarifying who makes decisions, when the board gets involved and how the company communicates externally

• • Directors need sufficient fluency in cybersecurity and AI to ask management the right questions

• Better information enables stronger strategic oversight

• • Directors may be able to challenge management more effectively if they receive clearer strategic metrics, alternative strategies, scenario planning, trade-offs and peer benchmarks.

• • Nearly 80% of surveyed directors said management could improve the materials they receive

• • Rather than presenting a predetermined answer, management should bring recommendations that give directors enough information to evaluate assumptions, consider alternatives and exercise meaningful oversight

• Board composition and succession planning must evolve with business needs

• • More than half of surveyed directors believed at least one board member should be replaced, while 71% said boards needed stronger AI skills

• • Board succession planning should begin with the company’s future strategy and the capabilities needed to execute it, rather than simply evaluating individual directors in isolation

• • Skills matrices should be living tools that evolve as business priorities change, rather than static disclosures in proxy statements

• AI governance requires fluency, education and strategic integration

• • Boards should improve their AI fluency without assuming they necessarily need a dedicated AI expert on the board

• • Directors must understand AI’s implications for strategy, risk, organizational culture and employee productivity

• • Boards should evaluate AI as an accelerator of business strategy rather than treating it as a standalone issue. Responsibility for AI strategy rests with the board, while audit or risk committees oversee associated risks

Quotes:

“Cyber is really not a technical issue for companies. It’s quite frankly an enterprise resiliency issue.”

“Boards that look at AI as an accelerator of the strategy and not its own as its own issue are the ones that are actually succeeding.”

“The most effective boards are the ones that have built a process and capabilities and culture to continue to evolve in today’s world.”

Links:

2026 Annual Corporate Directors Survey

Guest Bio:

Ray Garcia is a Senior Partner at PwC and Leader of the firm’s Governance Insights Center, with more than 35 years of experience advising Fortune 500 companies, boards of directors, and senior executives. Throughout his career, Ray has held significant leadership positions, including Chief Operating Officer of PwC’s US and Mexico Assurance Operations, Managing Partner of the Houston office, and member of PwC’s Board of Partners. His expertise spans corporate governance, financial reporting, enterprise risk management, mergers and acquisitions, and business transformation.

Ray brings a unique combination of financial expertise, strategic perspective, operational leadership, and extensive boardroom experience. As Leader of PwC’s Governance Insights Center, he works closely with corporate directors on critical issues shaping board agendas, including artificial intelligence, cybersecurity, corporate strategy, and emerging risks. He also serves on the Texas State Board of Public Accountancy, reflecting his commitment to public trust and effective governance. 

Transcript: 

Joe Ayoub (00:07)
I’m Joe Ayoub, and I’m here with my co-host Raza Shaikh. Twice a month, we explore what makes a board a strategic asset for any company or organization, as well as the important issues that are facing boards, company leadership, and stakeholders. Today we’re joined by Ray Garcia to discuss some of the most important findings from PwC’s 2026 Annual Corporate Directors Survey.

Before we introduce our guests, we’d like to thank our sponsors. First, we want to thank our longtime sponsor, the law firm of Nutter, McClennan and Fish, who is again a sponsor of the podcast and our onboard summit. With offices in Boston, New York, and San Francisco, Nutter serves as trusted counsel to a wide range of public, private, and nonprofit organizations, as well as investors and boards, helping them build, grow and govern through every stage of their development. And we’re proud to welcome PwC Private as a sponsor of our podcast and the Onboard Summit. For 25 years, PwC Private has focused exclusively on helping private companies, owners, and boards navigate complexity, make informed decisions, and prepare for what’s next. Our guest today is Ray Garcia, who is a senior partner with PwC and is the leader of PwC’s Governance Insights Center. He has over thirty-five years of experience advising global Fortune 100 and Fortune 500 companies.

Raza S (01:48)
In addition, Ray serves as the member of Texas State Board of Public Accountancy, as well as the advisory councils at Texas A&M and Trinity University.

Joe Ayoub (02:01)
Welcome, Ray. It’s great to have you with us today on On Boards.

Ray Garcia (02:05)
Thank you for having me. I mean that I’ve been looking forward to this day, so looking forward to our chat for the next hour or so.

Joe Ayoub (02:12)
Thanks so much. Before we get into the questions, it would be great if you could just talk a little about PwC’s annual survey. It’s been going on for a while. You can tell us how long, but it is one of the most well recognized surveys of its kind. So I think it’d be helpful for folks to know just how detailed you get and and how much work you put into this.

Ray Garcia (02:34)
Yeah, so the our annual corporate director survey is one of our flagship pieces we put out every year. we’ve been doing this for over a decade now. And we we we we go out there and actually interview through a survey many corporate directors. This year we exceeded six hundred. You know, these directors, you know, primarily you know, companies with over a billion in revenue is kind of the minimum threshold that that that we that we get. But we really get into the area of what are they thinking and trying to take a lot of the information of what’s going on in the world today and bring it back to board governance. And because quite frankly, it’s asking them how they could be better. And and we get a lot of great ins insights from that.

Joe Ayoub (03:20)
Hmm.

Yeah, that’s great. yeah, we look at it every year. And as you know, we’ve discussed it on the podcast several times in the past. So the first question is about board assessments. A pretty strong majority of survey of the directors you surveyed, over seventy percent, say that board assessments are not effective. Understanding that not all assessments are created equal, especially given the difference between internal and external assessments.

What are the things you see that are likely to make an assessment more effective?

Ray Garcia (03:55)
Yeah, thanks for the question. I mean, I think the issue is is that many board assessments historically has been treated more of as like an annual governance exercise than rather as a tool for future board performance. And so what happens with that is that I think that the stat that you threw out that boards basically sit back and think about, you know, how candid is their board assessment. I think the one thing that is important is is that you know, maybe once every three years, there should be a consideration of bringing in an experienced third party, you know, because I think that could be valuable in as far as a assessment is because what that really happens is that that third-party interviewer can really start digging into the questions to the board members and start asking some additional information that you might not just get from a survey. and once you get that information, I think that asking that first question, second, and third question. You then get to a point where you start looking at the issues that might be within the board, you know, from a standpoint.

Joe Ayoub (05:02)
Are there other things beside the interviewing process, with individual board members that you think can be impactful in making it more effective?

Ray Garcia (05:11)
Yeah, I I think what happens is once you go through an interview process or the survey process and you have that information, that assessment, as I mentioned, you know, at times it’s it’s backward looking. You really need to take that information and do something that that rem that we’ve got to remember what the board’s there for. The board is there is to really take into account the company strategy. So how do you take the team you currently have on the board and the assessment process related to that? And mirror the company’s strategy. So think about where the company may be in two to three years into the future. Do you have the right team members? So that really goes back to that a really good skills matrix on the board, you know, and are you planning for the future? So remember I’m not saying the an assessment should be just doing a wholesale change. What it really should be is thinking about where am I going and what do I possibly need.

Joe Ayoub (06:12)
And PwC as I understand it does do this kind of assessment for boards. How how long have you all been doing it?

Ray Garcia (06:16)
Absolutely. Yeah, absolutely. We’ve been doing assessments for many, many years, you know, and and I will tell you that when we visit with our clients about doing assessments, most of the time it is to discuss where they’re going in the future and how we can actually help them get there. ‘Cause I do think that, you know, the assessment is really forward looking, not not backwards. Yeah.

Joe Ayoub (06:39)
Right. Right. Great. Thank you.

Raza S (06:43)
Ray, AI is the topic of discussion in virtually every board. One aspect of the AI conversation specifically is the dramatic increase in the risk of a cyber attack. You know, many think that it’s a matter of when it will happen and not if. what have you seen boards do to help mitigate that?

Ray Garcia (07:07)
Yeah, that’s that’s a great point. you know, with AI coming to the forefront, you know, cyber was actually always a top five, you know, item on the ERM side for boards. but with AI, it’s clearly gone back up to either one, two, or three. I think cyber should be should be treated this way. Cyber is really not a technical issue, you know, for companies. It’s quite frankly an enterprise resiliency issue is what it really is. You know, and so AI clearly raises the stakes in both ways. And so, you know, from a cyber standpoint, you know, you can use AI to improve your defenses against cyber.

Raza S (07:44)
Mm-hmm.

Ray Garcia (07:45)
However, you know, the threat actors are using AI to try to penetrate. So you’ve got, you know, you’ve got two things going at each other. so so I’ll tell you a few things I think. That one is what what boards could be doing is really tabletops. You know, the tabletop exercises are very, very important because what you don’t want to happen is the first time that something is occurring, you know, when you’ve got a ransomware or a breach that that’s the first time that the board’s actually dealing with this. So I so I believe that a tabletop is it’s very important because you gotta start thinking about some very common practical questions, you know like who gets the phone call, when do we get the board involved, you know, who gets to make the decisions on all these? Is it the board? Is it management? Is it something together? You know, how do you communicate this to the external to the outside, you know, if the if the item gets to a certain level?

So there’s a lot of different, a lot of items that actually happen during a cyber attack that actually need to work through that from standpoint.

Joe Ayoub (08:45)
Mm.

Raza S (08:46)
Really very well said. You know, like on the one end, the attack is machine speed, the defenses are machine speed. and I think it really behooves a board to be ready for it because we know that it’s a matter of when, not if, and have practiced that and simulated that and done scenarios. What questions should boards be asking to management around that?

Ray Garcia (09:11)
Yeah, so so remember I think the com the commentary on this really is that the board doesn’t need to become a CISO. That’s not what we’re really asking, you know, but they need to have enough fluency around cyber and AI, quite frankly, to ask the right questions. You know, and so those questions really are which one of our assets are most critical and most vulnerable? So think about that. Think about it from an operational standpoint, you know, where are we most exposed? Okay. you know, what kind of impact would it be to our business and then really how is AI changing that risk profile? I think those questions are much more important than you know how many patches do we have and things from a technical standpoint. 

Joe Ayoub (09:52)
Yeah, that doesn’t yeah.

Ray Garcia (09:54)
It doesn’t fly. I mean to me it’s more of operationally where are we exposed?

Joe Ayoub (10:01)
So the next question is why do directors themselves apparently think boards aren’t challenging management enough? Since strategy oversight is arguably one of the board’s most fundamental responsibilities, what does that tell you about what’s really happening in a boardroom? Are boards receiving the wrong information, asking the wrong questions or are they simply not challenging management enough?

Ray Garcia (10:35)
I don’t really interpret the eighty-one percent that’s that directors are saying, you know, we’re not challenging management. I think what they’re really saying is that they could be more rigorous. You know, the process could be more rigorous than it currently is t today. So what I think the survey really tells me is is that it’s really an information problem. Okay. So a lot if you think of what you saw in the survey, a lot of the directors are telling us that that clear metrics around tracking the strategy.

Maybe the alternative strategies that could be out there are trade-offs, scenario planning, and quite frankly, benchmarking is actually information that could be better. I mean, if you saw the survey, almost 80% of them said that management could improve the materials they receive. So when I think about that and I think about the 80 on information and the 81 that could be more challenging, you really sit back and think about the fact that, you know, how can a director and management look at maybe a sixty or seventy page deck. And you know, a lot of these decks are very volumeless, you know. Yeah,
and so I mean you’ve seen them probably, you know, yourself, you know, on the boards that you sit on, you know, but really when you think about the strategy, it really goes back to, you know, what are some alternatives? You know, what are the assumptions and the trade offs? So I think it’s really an it’s the combination of an information flow, you know, with with how the team is actually the d the board is actually challenging management related to that.

Joe Ayoub (12:05)
Do you think that board members, you know, based on the survey, do you think that board members do have the sense that they may not be challenging management enough as a general as a general factor? I mean, is that do you think that’s true or it’s something else?

Ray Garcia (12:25)
Yeah, so I I think there’s a there’s a couple of things that go into there. I th I think that one is I think board if you saw the survey, you know, some of the board members were saying s directors were saying, you know, we need clear strategic metrics. So where are we where are we trying to go to? 

Joe Ayoub (12:39)
Hmm. Okay.

Ray Garcia (12:41)
You know, and I go back to y alternative options or trade offs, that was another thing. So so was scenario planning and peer benchmarking. I think it kind of goes back to that the materials could be improved, however, if I had the information

I might be able to ask some better questions of what of where we’re what we’re trying to go to. But I think the real question, a sharper question would be is that management shouldn’t bring to the board a you know management should bring to the board a recommendation, not a predetermined answer.

Joe Ayoub (13:14)
Do you think it’s the case in in most situations where they’re saying here’s what we’re going to do rather than here are the factors to consider in the board making’s decision? Is are you seeing that a little bit?

Ray Garcia (13:25)
Well like I think it just goes straight back to that board that directors are saying if I had better information,

Joe Ayoub (13:32)
Mm.

Ray Garcia (13:33)
you know, that I think that’s what it that’s what it really it really is from that standpoint. But I do think that you know remember that the responsibility of the board is oversight, you know, and it really isn’t about asking more questions. It’s about having the information to ask better questions.

Joe Ayoub (13:48)
Well yeah, it I agree. It’s clearly it’s oversight.

Ray Garcia (13:52)
Yeah.

Joe Ayoub (13:52)
But part of that oversight is being rigor is making sure that the decisions that management is making or is asking the board to make have been well thought through. So if the information they’re getting is not sufficient, then how do they do that? So I think it’s not a matter of how much information they get. It’s what their role is and the role is oversight, but it sounds like they just need better more and better information in order to do their job right. Yeah. Yeah.

Ray Garcia (14:20)
Well I that’s correct. I mean that’s that’s what that’s what they’re basically saying. They’re saying, Hey, if I had better information I could do my oversight role better. So yeah. Check

Raza S (14:30)
Right, this is a terrific survey. And in that survey, fifty-five percent of the directors think at least one board member should be replaced on their board. Seventy-three percent say board assessments need improvement. Seventy-one percent say boards need stronger AI skills, and eighty-one percent say boards could challenge management more effectively on strategy.

Does this suggest that the traditional model of incremental board refreshment is simply too slow for the pace at which companies and world is moving? If you were advising a board today, what might you advise it to do differently over the next few years to address this concern?

Ray Garcia (15:17)
Yeah, so

This is a great question. So this is the question that we ask every year. And and the interesting thing is is that this year so the question’s always had pr little over fifty percent. It’s kind of always been more th one individual needs to be replaced. So that’s that’s kind of there, all right. And what we’re seeing today is that that question is actually cleared up a little bit more, okay? And it’s cleared up in the fact that they’re saying that, hey, there’s some skills that we need, and in this situation.

It was AI, you know, to help, you know, to help our board be better. Okay. Now I’m not, I wouldn’t conclude that because you see that, you know, there’s over 50% that we need to turn, you know, the whole board. So what I would conclude would be is that boards still need to be more deliberate when they’re actually making changes. But it goes back to the initial question we all talked about earlier was what is the company’s strategy and where where are they going into the future?

So if I were advising a board, I’d be looking two or three years out. So I’d start, you know, with a company strategy, then really the current board roster, I wouldn’t start going, okay, I’ve got Ray over here, he’s not doing a good job, let’s take him out. You know, what I would do would be is let me think about where’s the company going, what kind of capabilities do we what kind of capabilities do we need, you know, going forward, you know, and start focusing on that rules, on that skill matrix and how do I improve, improve of what I have today. So it’s it’s that’s how I would start thinking about it.

Raza S (16:53)
Does the frequency and speed or the CPU clock speed of that process need to be a little faster because of this change? Are the time horizons shrinking and we need to do that type of exercise for boards more often?

Joe Ayoub (17:08)
Like maybe every year. I mean, do you I’m just gonna jump in. I mean, it seems to me that at least based on what I’m seeing here, it sounds like the process that you described should be something boards should be doing at least annually.

Ray Garcia (17:23)
I would think that most corporations, whether it’s the board or whether it’s management, that their succession process is a it’s a living document or a living tool. Okay, it’s not a start stop. You know, I think it’s it’s all it’s happening all the time. ‘Cause you know, if if we would have gone back a couple of years ago, individuals would might be saying, Hey, I I really need maybe an ESG expert on on my board.

Possibly, possibly not. Okay. You know, well today we’re sitting here today saying, Well, you know, do I really need an AI expert? You know, I I really think the the I really think that it’s the skill matrix, it’s not just a disclosure you put in your proxy. What it is yeah, what what

Joe Ayoub (18:06)
yeah, yeah, yeah.

Ray Garcia (18:07)
what it what it really is, it’s a living document that is that helps helps boards determine what they need. And I believe that because of the environment that we’re currently in, and and you all mentioned this is that

it’s ever changing. So you know, today I might need, you know, this kind of individual. Tomorrow I might need this. So it could change. You know

Joe Ayoub (18:28)
D do you do

most boards have what you refer to as a living, you know, basically a viable succession written plan? I I’m not sure I’m not sure that’s true, but you would you have a lot more exposure to more companies than I do. So what do you think?

Ray Garcia (18:44)
Well, I I’ll tell you that many boards disclose their skills matrix is what they do. Whether it’s living

Joe Ayoub (18:49)
Yeah.

Ray Garcia (18:50)
whether it’s living or not, I can’t really comment on that. but there’s a lot of

disclosures on skill matrix.

Yeah.

Joe Ayoub (18:57)
So I I guess maybe I would follow up by saying that’s probably not enough. It’s it’s it’s necessary but not sufficient. And that to address this overall concern, I mean the world is changing more quickly than ever. AI is one example, but it’s one of many examples. And the pace at which boards need to look at their composition and their skill matrix.

Probably needs to step up. In other words, you can identify a need today, and maybe in the past, you know, over the next two or three years, we’re going to recruit this. That may not be enough anymore.

Raza S (19:38)
Yeah.

Joe Ayoub (19:39)
may maybe

Ray Garcia (19:38)
Yeah. Now

Joe Ayoub (19:40)
nomgov committees need to be a lot more proactive and think of their time horizon a lot differently than in the past.

Ray Garcia (19:48)
Yeah, and and the other thing that I’ll tell you too that came from the survey that I think is very important is is really this. We’re you know, we’ve been talking for the last few minutes, quite frankly, on what I would consider a certain skill, okay. what I will tell you is what’s actually more important that came out of the survey is really cultural fit. You know, cult cultural

Joe Ayoub (20:07)
Sure. Yeah.

Ray Garcia (20:09)
fit by far, you know, was much more a need than really that skill, okay? And so what I would tell you would be is

that it I believe it was over 80% that boards are expecting more of a cultural fit than that technical thing. So what I’m saying is is that I think that when boards are going through this process, that culture with that technical skill has to come together, you know, to find the right individual for the board.

Joe Ayoub (20:38)
Yeah,

a hundred percent. I think A, I agree that it’s it’s that’s true. And B, I think it’s really a good thing because it isn’t just the skill, it is the team working together. I mean, to use the basketball analogy, you could have the five greatest centers of all time, but that doesn’t mean to be a good team. So what’s the fit? Right. That’s the f the

Ray Garcia (20:56)
Yeah. Someone’s gotta pass the ball. Yeah. Yeah. Yes.

Raza S (20:59)
Okay.

Joe Ayoub (21:02)
fit is so important. It is like building a team.

Raza S (21:04)
Yeah.

Joe Ayoub (21:06)
You need the skills, but you need the skills to work together. So to the extent that that boards are increasingly recognizing that as really a of primary importance, I think that’s a I think that’s a terrific development, actually.

Ray Garcia (21:21)
Yeah, the way the way I would look I mean, so I kinda go back to the thing. So when you look at the we’ve talked about skill matrixes and r r and r replacing someone, I really wouldn’t take from the survey that boards aren’t doing their job. Okay. What I what I would take is the jobs changing faster, okay,

Raza S (21:37)
Hmm.

Ray Garcia (21:38)
as you mentioned, than the traditional board practice. So whether it’s around assessment, cyber, AI, strategy succession, you know, I I think adaptation is actually a common thread in all of this. Okay. And so the most effective are the ones that have built a process and capabilities and culture to continue to evolve in today’s world?

Joe Ayoub (21:59)
Yeah, they are gonna be so such in such a better position to deal with the pace that is changing than boards that haven’t done that. That makes perfect sense to me. 

Raza S (22:10)
I think it’s the the Dar Darwin analogy, it’s not the strongest or the fittest, but the most change adaptable that will will survive. And I think Board needs to respond. Ray, finally, your choice. what jumped for you, if anything, in the survey, or maybe just general comment on I I’ll call it the state of the union of government governance. Any final thoughts?

Ray Garcia (22:38)
Yeah, so so I’m gonna have to go back to the two letter word for a few minutes. Okay. You know, so you know, you can’t you know, we we’ve kind of we’ve kind of touched it around it. So I I think that, you know, clearly AI fluency, you know, kind of really popped out. You know, it popped out not only on what popped out from the board themselves saying that I believe over seventy percent actually needed to improve the fluency related to AI. And remember, I’m not a proponent that I need we need an AI expert on. The board you know but the fluency needs to needs to increase you know from that side so that that really came out came out to me you know from that point I also think that one of the things that goes there is really that that boards today think about when they think about a they think about fluency and education I think education is something that that board members and I think a lot of them do a really good job of enhancing education with whatever topic is going on. So I’m always a a big proponent of educating boards and I see board members you know doing that. So I I think that’s very, very important. But going back to AI, I think that you know a lot of the information that’s there, you know, AI still needs to be measured because I think boards are basically looking at like how do you measure the investment in AI? But the boards that look at AI as an accelerator of the strategy and not its own as its own issue are the ones that are actually succeeding.

You know, additionally, taking AI across the different factors in a corporation where the you know, it has cultural impacts. And I’m a big I’m a big proponent of culture. You know, so when you start thinking about employees working with agents, you know, how do you take that into play? You’ve seen a lot of CEOs come out and you for a while were saying that AI will replace employees and now you’re seeing a lot

Ray Garcia (24:31)
of CEOs talk about, you know, how AI will help the employee be a better employees. Employee and get more

Raza S (24:37)
Yeah.

Ray Garcia (24:38)
get more productivity. But ultimately the board is responsible for strategy around AI. The audit committee or risk committee is responsible for the risk associated with AI. You know, so there’s there’s a lot going on and I think that currently boards are working to try to get their arms around all this and some are better than others.

Raza S (24:58)
Mm-hmm.

Joe Ayoub (25:01)
Great. Ray, thanks so much. And thanks so much for joining us today on Onboards. It’s been great having you as a guest.

Ray Garcia (25:08)
Yeah. Thank you for having me. I’ve had a great time.

Joe Ayoub (25:11)
And thank you all for viewing and listening to this episode of On Boards.

Raza S (25:17)
If you’ve enjoyed the show, follow it and leave a review. We look forward to seeing you on the next episode of Onboards. Thanks.