Heidrick & Struggles
18 November 2024
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. But other issues – such as the rising importance of generative AI (GenAI) and intensifying trade and geopolitical disruptions – have also become a central part of the Board agenda. These interconnected dynamics are forcing Directors to navigate an increasingly unpredictable environment filled with conflicting and often politically charged demands.
BCG, the INSEAD Corporate Governance Centre and Heidrick & Struggles have teamed up to understand how Boards are responding to these complex trends and disruptions. This is the third report in Heidrick & Struggles' series. The survey in 2024 includes 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 research sheds light on Boards’ hard work on these issues. Heidrick & Struggles see that Boards have made meaningful advances to address sustainability topics and are less confident when it comes to their understanding of and ability to capitalise on GenAI.
Heidrick & Struggles' work also reveals that the lessons Boards learned by addressing sustainability issues are helping them evolve toward a new model of governance. In roundtable discussions, for example, Directors articulated a need to transition from traditional models that primarily emphasise a rear-view mirror approach focused on performance and compliance monitoring to a more dynamic approach that stresses forward-looking strategies and adaptability. “Effectively managing uncertainties starts by recognising their constant presence and developing the resilience to navigate through them as they emerge,” a European Director at a diversified conglomerate asserted. Another Director pointed out, “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 judgment and personal character become just as important as deep business expertise.
Read the full pdf report below.