In a world where multiple wars are raging, inflation is heating up, unanticipated risks from artificial intelligence are emerging and shareholders are less willing to hold onto stocks of nonperforming companies, the board’s oversight of strategy is taking on much greater importance.
New research from PwC’s 2026 Annual Corporate Directors Survey suggests that board members will need to focus more aggressively on strategy if they want to keep their positions as directors. According to the report, more than four in five directors surveyed (81 percent) said their board can challenge management on corporate strategy more effectively. Given the current economic climate, more constructive engagement with management will be needed to deal with the different headwinds many companies are facing.
The PwC survey lists several ways directors felt management could improve board materials to assist their ability to provide constructive contributions to strategy. Directors said board materials could:
- Better synthesize information to highlight key risks (41 percent)
- Structure agendas to prioritize strategic discussion and Q&A (34 percent)
- Include more forward-looking analysis (32 percent)
- Provide consistent KPI dashboards aligned with strategy (32 percent)
Of course, it’s easy to suggest that better information from management will lead to better outcomes, but oversight is not that easy. In the current atmosphere that features risks companies have never faced before and many business outcomes that cannot easily be anticipated, board members may need to re-examine their boardroom culture to make sure the environment allows for discussion of intensifying their oversight of strategy.
For examples:
How will any suggested upgrades in board materials be handled? Is the relationship between the board and management strong enough to get any requested changes implemented? What happens if management “upgrades” the information, but it still misses the mark? Board members will need to think about what can be done if information provided to the board does not sufficiently support the corporate strategy presented by management. Are there other sources of information that can help?
Does the company culture encourage a new spirit of challenging corporate strategy? Improved board oversight shouldn’t necessarily turn into a battle between management and the board. It is imperative that management be open to a more rigorous discussion of corporate strategy because of how quickly market conditions can change. If the company culture is not accepting that corporate strategy will be challenged, then will the board exercise its oversight duty and challenge management anyway? Boards should think seriously about this.
Is the board prepared to “refresh” its membership to facilitate better oversight? If boards are going to be serious about challenging corporate strategy, they must have members with the appropriate skills and experience. Some boards may need to add or delete members in order to conduct more efficient oversight.
