The study also found that only 15% of the interviewed non-executive Board Members value independence, a key factor for fostering innovation and challenging established norms.
This shortfall raises concerns that Romania may be stuck in the middle-income trap, struggling to keep pace in an increasingly agile and disruptive global economy.
The findings indicate that boards need to focus on strategic oversight, which 28% of participants identified as the most crucial skill for future success. This involves setting ambitious long-term objectives, questioning outdated practices, and enhancing agility in response to emerging challenges.
The survey, conducted between July and October 2024, gathered insights from Romanian non-executive board members through personal interviews, highlighting the major gaps between Romania and advanced Western European economies. Despite impressive GDP/capita growth, rising from $2,100 in 2002 to $19,500 in 2024, Romania still trails significantly behind Western Europe, achieving just 36% of Germany’s per capita income.
This discrepancy underscores the need for a new development model that prioritizes innovation and transforms corporate governance so that Romania can overcome the middle-income trap and align itself with the region’s advanced economies.
“The current Non-exec Board model focuses too much on operational tasks and control but lacks the international perspective and innovation needed to compete with Western economies. Romania needs to re-prioritize strategic oversight in corporate governance, bring in non-executive board members with international experience, and move from control and operations to innovation. Furthermore, open debate and mentorship are key to boosting decision-making and competitiveness”, said Johannes Burghold, Managing Partner at TRANSEARCH Romania and Regional Vice President for Eastern Europe.
The International Monetary Fund (IMF) projects Romania’s medium-term growth potential at 3.75%, but realizing this target requires systemic changes. Corporate non-executive boards have a crucial role to play by driving strategic decisions, enhancing global competitiveness, and developing top talent.