When Harley-Davidson announced a successor to longtime CEO Jochen Zeitz this spring, the motorcycle maker probably didn’t expect to be slammed into a proxy brawl over it. But that’s exactly what happened as activist investor H Partners came roaring in, accusing the board of botching the succession process and demanding a total leadership overhaul.
H’s argument? The board’s preferred successor was chosen behind closed doors, without sufficient strategic clarity or outside search. Harley fired back, calling the claims self-serving. But the damage was done: Shareholders—already grumpy with a share price down 35 percent over the prior year— had a front-row seat to a talent strategy debacle playing out in real time.
With CEO tenures shrinking and exit strategies accelerating across industries, boards that are not prepared with a clearly defined and well-thought out strategy for succession will find themselves in the crosshairs. And that’s just one of many talent-related risks: AI is rewriting job descriptions faster than CHROs can post them. Workers are staying put not because they’re loyal and happy but because they’re afraid to make a move in a volatile climate. Compensation strategies built for stable markets are crumbling under the weight of trade wars and inflation spikes.
Directors are taking notice. In a recent survey conducted by Corporate Board Member with Farient Advisors, 69 percent of directors said they expect their board to spend more time on broader workforce issues. Meanwhile, in our 2025 What Directors Think survey, 30 percent of directors said they want more opportunities to hear directly from non-executive employees—and named the CHRO as the most valuable voice in the boardroom after the CEO and CFO.
“We’ve seen workforce issues climb to the top of the board’s agenda in recent years,” says Melanie Nolen, research director at Chief Executive Group, Corporate Board Member’s parent company. “The pandemic may have initially brought them into focus, but it’s the accelerating turnover in leadership and the relentless pressure to adapt to technological and market shifts that have kept them there. Directors know they’re increasingly accountable for ensuring the right people are in place, starting at the very top.”
More than a quarter of directors report that their comp committee’s responsibilities already extend beyond pay to include oversight of retention and turnover company-wide. “Most companies now view that particular board committee as focused on human capital and talent development and retention, as well as the classic pay questions,” says Margaret Shan Atkins, a director at Darden Restaurants and SpartanNash.
In interviews with more than a dozen leading advisors, governance experts and board veterans, one theme emerged clearly: Boards that fail to evolve on talent oversight will find themselves presiding over stagnant pipelines, disengaged employees and activist-attracting pay practices that no longer reflect reality. Following are seven strategies that can help address the most urgent talent issues facing boards in 2025.
1. Be sure compensation strategy reflects potential volatility—but don’t overreact.
When pay programs use the value of the stock to align performance with shareholder interests and then that stock tanks due to external factors—e.g., sweeping tariffs and market whiplash—boards worried about retention can be tempted to make changes.
But Mark Weinberger, a director at JPMorgan Chase, Johnson & Johnson, MetLife and Saudi Aramco, cautions boards to resist reacting to every market shock or geopolitical ripple. “One of the biggest mistakes a company can make is over-pivot to the headlines and not focus on the overall trend lines,” he says, adding that external forces will always throw wrenches into well-made plans. “You have to understand what they may be and scenario plan the what ifs.” But don’t overweight trying to forecast the future. “That can take over your entire board discussion if you’re not careful.”
Farient CEO Robin Ferracone urges boards to build flexibility into their plans, starting with wider goal ranges that can withstand year-round turbulence—the idea being not to predict every disruption, but to stay strategic even when the ground shifts beneath your feet. She adds that boards should embrace “bounded discretion”— leaving room for thoughtful midstream adjustments, not panic-fueled improvisation.
“Companies that overreacted during Covid got into trouble,” says Ferracone, who adds that use of discretion must be precise and credible. “If the CEO pay is not aligned with shareholder experience, you’ve broken the credibility both internally and externally.”
Kathy Gersch, chief growth officer for Kotter, echoes this sentiment, noting the importance of compensation structures tailored to both short-term realities and long-term strategic imperatives. “The comp committee must understand market volatility, inflation and broader economic impacts,” she says. “Incentive structures that reflect actual controllable outcomes, rather than uncontrollable external factors, are becoming increasingly essential.”
Matt Turner, president of Pearl Meyer’s executive compensation consulting, agrees: “You want to have those [exceptions] as minimal as possible.” And in cases where adjustments are necessary, transparency is non-negotiable.
Atkins adds another key consideration: “Make sure that the people you believe are the difference-makers are going to stay, are incentivized to do what you need them to do and feel fairly compensated for the difference they’re making.”
Bottom line? “A good compensation plan is not just about paying your executives,” Weinberger says. “It’s about architecting a system of aligned incentives that drives leadership behavior and creates long-term value.”
2. Dig deep to bolster the pipeline.
With CEO exits on the rise and volatility rewriting the playbook, boards can’t afford to focus only on the corner office, nor can they depend on a once-a-year slide deck review. They need to ensure the company a robust set of versatile leaders who will be ready when asked to step up when the unexpected hits. “That sort of talent pipeline, and the readiness of that pipeline farther down in the organization, is something the board should be thinking about and gaining visibility to,” says Gersch.
Dennis Carey, vice chair and co-leader of board services for Korn Ferry, agrees, noting that successful CEO transitions depend on a solid talent strategy throughout the organization. “Succession planning is not simply about identifying the next CEO,” he says. “It’s about building multiple potential successors within the leadership ranks and regularly testing them with diverse, challenging assignments. Boards must have multiple ready-now candidates at every senior level.”
That means running human capital audits, rotating leaders through stretch roles and keeping a live shortlist that reflects not just loyalty—but also real, measurable results. “The person who’s great now may not be right for what the business will require three years from now,” Carey notes. “The spec of the job has to align with the strategy—and the person.”
As boards and CEOs assess internal talent rigorously, they need to move on from underperformers faster than they have historically, says Carey. “You don’t keep basketball players on the court if they’re fouling out or not contributing—why should CEOs do that with leadership teams?”
Boards are also relying far more on past performance data when selecting candidates for CEO succession. “Boards are now requiring more information than just, ‘Oh, we interviewed him and he looks like a great guy,’” Carey says. “Now they’re saying, ‘Wait a minute—what are the metrics? What did this person really contribute?’”
To cope with an increasingly volatile and unknowable future, savvy boards are zeroing in on agility as a key component. “We’re seeing that transformational leaders—those who can adapt to change quickly, who can bring people along with them—are rising to the top,” says Weinberger. “Maybe the way boards look at successors needs to change: more agility, more communication, more ability to lead in uncertainty.”
Adds Carey, “Post-Covid, boards are leaning into simulations and assessments to surface leadership red flags that interviews miss. These stress-test how leaders think under pressure—and whether they can actually lead through uncertainty.”
Succession isn’t a fire drill—it’s a continuous muscle. “Effective boards focus on succession as an ongoing strategy rather than a contingency plan,” Gersch says. “You should always have a deep bench, actively preparing talent for leadership—not just for the CEO role, but across all strategic executive positions.”
3. Insist on visibility into culture and workforce sentiment.
Boards that want a real picture of company health need to go straight to the source. That means reviewing raw engagement data, listening in on skip-level conversations and digging into exit interviews and whistleblower reports.
While some boards may be tempted to deprioritize retention—after all, attrition is down—that’s a dangerous illusion. As Gersch warns, “Low attrition might be a mirage.” People aren’t necessarily staying because they’re engaged—they’re staying because the market feels too risky to jump. “As soon as that condition changes, if you haven’t shown them that you value what they contribute,” she says, “they’ll leave.”
Weinberger adds that digging into raw engagement data and the statistics measuring sentiments around culture are key. “Engagement has always been a key component of culture and values. [Engagement scores] tell you whether people understand the strategy and their role in it, and whether they feel fairly compensated. That’s a huge element of productivity and retention.”
And the mood in the middle is just as critical to watch as senior management. If employees lower down in the organization aren’t happy, they won’t put in the extra effort to delight customers, boosting market share and bottom line. “The last 2 percent effort is what doubles the value,” says Dan Ryterband, CEO of FW Cook. “But if you’re unhappy with leadership, you don’t give that last 2 percent. Or the last 10 percent. Or you just quietly start to disengage.”
Workforce sentiment is more than a feelgood metric—it’s a predictor of business performance. “When I was at EY, we used data analytics to compare engagement scores with quality and financial results,” Weinberger says. “There was a direct correlation.”
Carey adds a final note of urgency: “Culture isn’t a backdrop anymore—it’s a strategic lever. Boards that treat it passively are playing defense in a game that’s moving way too fast.”
4. Pressure-test leadership’s AI readiness.
Boards need to be asking: How is AI disrupting the talent model? What upskilling is underway? What skills gaps remain? How is automation affecting morale and long-term retention? “AI is fundamentally changing the requirements of what you need in an individual [employee],” says Carey. “They have to understand the tools available to them to be more effective. Whether you’re a top leader or you’re in the mailroom… AI is dramatically speeding up the game.”
David Porteous, lead director at Huntington Bancshares, emphasizes a balanced approach to AI integration. “We see AI first and foremost as a way to enhance productivity and provide more time for our colleagues to serve our customers in other ways,” he explains. “It’s part of our customer-centered culture.” However, he cautions boards to also remain vigilant about potential pitfalls. “Every organization should be spending a lot of time talking about how AI enhances our organization and the customers we serve, but also the negative or unintended consequences that could come from AI.”
For all the buzz around AI, most boards lack the fluency to evaluate its workforce impact—let alone guide strategy. “Probably the biggest risk for any company is not being technology-driven and reforming quickly— because then you’re going to be left behind,” Weinberger says. “Boards need to work cross-functionally to understand where the new risks are coming from and what tools leadership actually needs to manage them.”
AI isn’t just about algorithms and automation; it’s about people. If boards don’t understand how AI is reshaping roles, reconfiguring org charts or reshuffling incentives, they’re flying blind.
5. Boards must modernize director skill sets to keep pace with oversight demands.
It’s no longer sufficient to stock the boardroom with finance and legal veterans. Overseeing today’s talent agenda— AI integration, labor volatility, regulatory flux—requires directors who understand how people, performance and disruption intersect. Boards need members with operational agility, workforce fluency and enough range to pressure-test HR strategy and culture health, not just the balance sheet.
Still, says Gersch, overlooking human capital expertise is a nonstarter. “If your CHRO isn’t in the room helping develop talent strategy, you’re way behind.”
But you can’t simply slot in one “AI director” or lone HR pro and call it a day. “It would be a mistake to recruit somebody for only one particular subject matter expertise,” says Porteous, noting that when you have that one expert, the rest of the board tends to defer to him or her. “Directors should bring a mix of skills and collaborate to enhance the board’s overall effectiveness.”
Weinberg agrees, noting that a board made up of narrow specialists won’t be able to provide the kind of strategic oversight companies need, and investors deserve. “You need leadership experience—people who understand purpose and values, not just the bottom line— and can collectively tackle the complexity,” he says, adding even more bluntly: “You need a board that works together as a team and has been through transformations. People who can think through big, complex problems without all the information—that’s who you want at the table.”
