Priorities for Governance in 2025

Corporate governance is evolving rapidly, driven by emerging trends that boards must address for effective oversight and smarter cyber risk management. A Deloitte survey highlights a potential blind spot, with 45% of boards not yet considering generative AI in their strategies.

Priorities for Board in 2025 include:

1. Generative AI: AI is transforming corporate operations, but boards must balance readiness and regulatory concerns. Many organizations are delaying AI investments due to anticipated regulations, yet developing policies and structures for AI adoption is crucial for success. AI offers opportunities to enhance efficiency, productivity, and cost reductions.

2. Corporate Culture and Financial Fraud: In 2025, combating financial fraud will require fostering a culture that promotes transparency, enabling boards to receive both good and bad news. Integrating leadership with board directors enhances compliance and strengthens ethical practices, which can boost organizational performance by up to 40%.

3. Ethics in Technology: The adoption of new technologies like AI introduces ethical challenges, such as bias and privacy risks. Boards must address these issues to ensure transparent decision-making and data management in alignment with ethical standards.

4. Cybercrime: As cybercrime continues to rise, fueled by the increasing value of digital assets, organizations must enhance cybersecurity measures. The adoption of generative AI has expanded attack surfaces, increasing risks. Vigilance in managing infrastructure and data is critical to prevent breaches, as seen in the CrowdStrike software outage that affected millions globally.

5. Data Infrastructure: Boards are embracing better data infrastructure to improve decision-making and streamline meetings. Modern reporting structures help boards stay agile, allowing them to adapt quickly to technological, ESG, and cybersecurity challenges.

6. Attracting Young Talent: The workforce is shifting as Millennials and younger generations dominate. As baby boomers retire, companies must address challenges in leadership succession and adapt to hybrid work models to retain talent and maintain productivity.

7. Board Evaluations: Investors and consumers are increasingly focused on board effectiveness. Boards must conduct thorough evaluations to improve performance and ensure integrity in decision-making, fostering an environment of continuous improvement.

These trends underscore the need for boards to adapt to technological advancements, improve data management, and nurture ethical cultures to navigate the complexities of modern corporate governance.

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