Emerging Global Corporate Governance trends

Global corporate governance is shaped by various emerging trends that reflect shifting geopolitical, technological, and economic forces.

Key trends include:

1. Evolving AI Regulations

AI regulations are developing rapidly and diversely across regions, creating challenges for global companies. The U.S. is adopting a decentralized regulatory approach, while the EU has implemented a comprehensive AI Act. Other countries, such as Canada and Japan, are also refining AI policies. These fragmented regulations require boards to stay informed and agile to navigate varying legal landscapes, particularly in regions like China and Latin America, where AI frameworks are still evolving.

2. Geopolitical Instability and the Russia-Ukraine War

The Russia-Ukraine conflict and the rise of far-right political movements in Europe are influencing corporate governance. The war has caused supply chain disruptions and energy security issues, which boards must address while managing a politically polarized environment. Boards need to adapt to shifting political dynamics and foster unity within organizations during these challenging times.

3. Health Crises and Economic Growth in Africa

Recurring health crises and economic instability in Africa, coupled with a growing youth population, present both challenges and opportunities. Boards in Africa must focus on governance practices that leverage the potential of young talent while addressing social inequality and economic instability to support sustainable growth.

4. Emigration and Instability in Latin America

Mass emigration from Latin American countries due to economic hardship and violence, combined with the impacts of climate change, is affecting regional business landscapes. Boards must manage potential talent shortages and contribute to fostering stability, economic development, and good governance.

5. China's Influence on the Indo-Pacific

China’s growing influence in the Indo-Pacific region, particularly its actions in the South China Sea, is increasing geopolitical tensions. Boards in the region should prepare for trade disputes, tariffs, and the potential fallout from strained relations with the U.S. and India.

6. Impact of the Israel-Palestine Conflict

The Israel-Palestine conflict is creating both ideological and economic challenges for boards, especially as governments and customers take differing sides. Companies will need to navigate difficult discussions around corporate social responsibility while responding to the broader economic impacts of the war.

7. India’s Commitment to Sustainability

India is strengthening its regulatory framework around sustainability, particularly through updates to its Business Responsibility and Sustainability Reporting (BRSR) framework. In 2025, companies must adopt third-party verification for BRSR disclosures, positioning India as a global leader in corporate responsibility. Boards will need to enhance their sustainability practices to comply with these evolving regulations.

8. New Tariffs and Trade Wars

Global corporations are preparing for the potential of the escalating impacts of tariffs, particularly as many countries elect far-right leaders. The U.S. may introduce tariffs, leading companies to adjust supply chains, such as moving production out of China and into India. Boards must navigate these challenges to maintain growth and minimize the risks of trade wars.

These trends require boards to be proactive, adaptable, and vigilant in managing risks and opportunities globally.

Future-proof your corporate governance framework for success in 2025

Corporate governance changes quickly. While it’s important to understand the top trends in corporate governance, it’s equally important to implement a governance framework that evolves as the business landscape changes.

Courtesy of Diligent Co. - https://www.diligent.com/en-au/resources/blog/corporate-governance-trends