A recent global survey reveals that while corporate boards have made strides in sustainability, they are increasingly concerned about the implications of generative AI and geopolitical instability.
Conducted by Heidrick & Struggles, Boston Consulting Group (BCG), and INSEAD, the report highlights a lack of confidence among directors regarding their ability to navigate these emerging challenges. Only 36% of directors feel prepared to leverage the transformative potential of AI, and just 37% believe their companies have adequate strategies to address geopolitical risks.
The survey shows that 77% of board members believe their companies should engage with societal issues, yet 54% prioritize business goals over these responsibilities. This disconnect underscores the urgent need for a balance between traditional governance and forward-looking strategies.
Concerns about leadership effectiveness are evident, with 29% of directors lacking confidence in their CEO's ability to manage disruptions. Meanwhile, 26% of CEOs express skepticism about their board's effectiveness, reflecting growing tensions within executive teams.
As the corporate landscape evolves, the ability of boards to adapt and align with innovative strategies becomes crucial. Effective governance, characterized by proactivity and resilience, will be key to transforming disruptions into opportunities for growth.
Jeremy Hanson from Heidrick & Struggles emphasized the importance of alignment between boards and management, stating that open discussions are vital for making robust decisions in today's complex environment.
Sonia Tatar from INSEAD urged boards to shift from reactive to proactive approaches, anticipating future risks and capitalizing on emerging trends.
David Young from BCG noted that while boards have made significant progress in sustainability, they must now engage deeply with management to tackle the complexities of today's challenges.