EDITORIAL: BOARDS AND SOCIETY

Boards of directors are confronting an ever-expanding list of critical, complex topics - many of which reflect powerful external trends and disruptions. For the past few years, that list has been driven by an increased urgency to address climate and sustainability issues, and that imperative continues. However, other issues, such as the rising importance of generative AI and intensifying trade and geopolitical disruption have also become central to the board agenda. These interconnected dynamics are forcing directors to navigate an increasingly unpredictable environment filled with conflicting and often politically charged demands.

This report from The Boston Consulting Group, The INSEAD Corporate Governance Centre and Heidrick and Struggles includes a survey of 444 directors and executives around the world, along with a dozen roundtables that brought together more than 130 directors in North America, Europe, Southeast Asia, Africa, and South America.

The societal expectations for companies—and, by extension, for their directors - have never been higher. A majority of respondents (77 per cent) report that boards have the responsibility to address broader societal concerns. Although 54 per cent still believe that business objectives should remain the primary focus, 23 per cent believe that boards should put societal concerns on a par with - or even above - such objectives.

As one director in the research put it: “You must continue to accept uncertainties; controllability does not exist. This requires resilience from people and companies - and that is far more essential than any specific actions.”

The current reality makes the role of directors more challenging than ever. But it also puts them in a position to add more value than ever. As issues grow more complex, sound business judgement and personal character are increasingly just as important as deep business expertise.

You can read the full Report here.

This is the last newsletter of the year, so we would like to take this opportunity to thank our FT NED Club members for their continued support over the year and to wish everyone a very happy holiday season and a great 2025.