Every year since 2002, Corporate Board Member has been surveying U.S. public company board members to take their pulse on the issues that are top of mind, the challenges they face in the year to come and the processes they seek to improve.
In the fall of 2024, Corporate Board Member partnered with Diligent Institute and FTI Consulting to survey more than 200 directors of publicly traded companies in the U.S. on what’s on the board agenda for the year ahead, potential headwinds and tailwinds and what they perceive to be the main priorities in the short term.
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of directors are prioritizing growth opportunities in 2025, a sharp turnaround from the past few years’ focus on cost-cutting measures.
of respondents say that their board has reviewed its process for identifying and disclosing a cybersecurity incident, which suggests a potential gap in board-management communications on this issue.
of directors consider shareholder engagement and activism a top priority, a significant downshift from prior years.
of directors this year chose “strategy” as their top oversight challenge, ahead of all other issues in their purview.
After years of putting out fires, the great majority of U.S. public company board members surveyed are starting 2025 feeling more in control and optimistic, with 76 percent choosing “pursuing growth” as their top priority this year.
That proportion increases to 88 percent when isolating the data by sector, with respondents from the automotive & industrials sector being most growth-driven, according to the survey.
There is a certain level of consensus on the way companies plan on seizing those growth opportunities, too. Most respondents expect to make use of an improving M&A landscape, taking advantage of lower interest rates and what many observers anticipate will be a less regulated or scrutinized framework for dealmaking.
In fact, M&A is the third most cited priority for the year (compared to fourth place in our 2024 report); it is up 30 percent on the list of issues that directors want to discuss at their next board meeting, and it is climbing on the list of expertise directors want to add to their board with their next appointment.
Directors at insurance companies are the only group not bullish on M&A, with only 9 percent listing a potential transaction as a priority for the year.
Instead, these companies are focusing on integrating emerging technologies and pursuing growth avenues, both tied as their top two priorities for the year.
The data also suggests that companies with an international footprint are showing greater interest in M&A in 2025 compared to their domestic counterparts.
While growth is a priority for domestic companies, directors say this will mainly be achieved through optimizing financials, including pricing strategy, rather than M&A.
Furthermore, the data points to a negative correlation between the size of the company and its intent to seize M&A opportunities this year.
Only 29 percent of those with $10 billion in revenue or more showing interest in dealmaking vs. 41 percent of those with less than $300 million in revenue.
For those larger companies, growth is likely to be achieved through the pursuit of digital transformation, the second most cited priority for them in 2025.
As the past five years have revealed, companies cannot be overly prepared for sudden disruption. Among the risks that could have the biggest impact on their company’s strategy in 2025, 69 percent of directors said the sudden departure of the CEO or a key executive would have significant consequences, and 61 percent say the same of a major cyber incident.
Data from the survey also finds CEO/C-Suite succession planning more prevalent among the issues that will be front and center in 2025. It ranked fourth on the list of priorities, second on the list of most challenging issues to oversee and third on the list of most pressing agenda items.
As a comparison: the year prior, succession planning ranked sixth on the list of priorities and fourth on the list of most challenging issues to oversee.
It’s worth noting that 2024 was also a peak year for CEO departures, and nearly two-thirds of board members told Corporate Board Member, in a survey conducted in June with Farient Advisors, that the high level of CEO departures at public companies had sparked new conversations within their board about the increased risk of turnover and the importance of emergency succession planning.
This focus on succession planning is particularly apparent among directors on the board of smaller companies (revenue of $1.9 billion or lower), who were also more likely to select it as a 2025 priority and an agenda item for their next meeting compared to their larger counterparts.
Meanwhile, only 21 percent of directors overall rated their board’s current CEO succession planning process as “excellent,” a problem that directors say is exacerbated by shorter tenures and an increase in talent poaching at the leadership level.
of boards understand the damaging results a major cybersecurity incident can bring and how such an incident would have a “significant” impact on their strategy.
That cybersecurity is also a top concern this year doesn’t come as a surprise, but while cyber threats and the need for corresponding risk mitigation tactics, communications and disclosure strategies are now established board-level topics of discussion, implementing effective strategies to address them remains a challenge for organizations and their boards.
A majority of respondents (61 percent) noted that their boards understand the damaging results a major cybersecurity incident can bring and how such an incident would have a “significant” impact on their strategy. Among the fallout from such an incident, the resulting reputational concerns should also be top of mind for corporate boards.
This understanding is further highlighted by more than 70 percent of respondents saying that the senior leadership team member responsible for cybersecurity at their organization (e.g., their CISO or CIO) regularly meets with the board to discuss the evolution of cyber risk and their associated strategy.
Adopting and improving their understanding of generative AI ranks sixth on directors’ list of priorities for 2025 and seventh on the list of agenda items most pressing to discuss at their next board meeting.
This is especially apparent among directors on the boards of larger companies (revenue of more than $1.9 billion), who were more likely to select generative AI as a 2025 priority and agenda item for their next meeting compared to their smaller counterparts.
A clear majority (80 percent) of the public company directors surveyed say their company has taken some type of action with respect to rapid changes in the development and deployment of AI, with the most common action being incorporating the technology into one or more areas of the business, including products and services (44 percent).
To highlight the speed at which companies are responding to these new developments, only two-thirds of the board members we polled in May 2023, as part of Corporate Board Member‘s Director Confidence Index with Diligent Institute, said at the time that their companies were taking action around AI.
The data shows strong variations by sector as well.
In the insurance industry, where InsurTech (a subset of financial technology specifically for the insurance industry) is disrupting legacy firms, 80 percent of directors say their company has incorporated AI into one or more areas of the business, including products and services—and 60 percent have expanded the mandate of one or more board committees to address AI risk and strategy.
Those numbers fall to 33 percent and 17 percent, respectively, in the automotive and industrials sector.
Among the benefits directors see with generative AI and emerging tech, the survey found “optimizing operations and costs” and “enhanced workforce productivity” as the top opportunities presented by AI integration. The numbers, however, are heavily skewed by those in the materials and real estate sectors, where 62 and 63 percent of directors, respectively, selected “optimizing operations & costs” as a top answer.
Finally, innovation ranks fifth on the list of opportunities afforded by the technology, indicating that many companies are likely in the early stages of their AI journeys.
of directors say the biggest challenge with AI is the lack of knowledge and capabilities among their leadership team.
A third of directors say the biggest challenge with AI is the lack of knowledge and capabilities among their leadership team. It is the number one risk of generative AI tools highlighted by survey respondents, even ahead of data privacy (29 percent) and false information (26 percent).
Here, too, the data reveals important variations by sector.
Among the directors who feel their leadership team lacks capabilities in emerging technologies, the data shows a higher proportion are on the boards of financial services companies (43 percent) and consumer discretionary companies (40 percent).
Overall, five sectors ranked above average in that belief: materials (39 percent), automotive & industrials (38 percent), and aerospace & defense (33 percent) round out the top five.
At the opposite end of the spectrum, we find directors on the board of real estate, insurance and energy companies as the three groups who have the most confidence in their leadership team’s AI understanding—even ahead of directors at tech companies (20 percent).
We found no correlation or pattern when looking at these from a company size perspective.
In today’s volatile environment, most board members recognize the importance of global supply chain risks and regulatory challenges.
Eight in ten directors surveyed cited renewed supply chain disruptions as a risk, underscoring the fragility of supply chains and the need for contingency plans.
Looking more specifically at directors whose board companies have international exposure, we find 79 percent who view geopolitical events as a threat to their business strategy, with 30 percent identifying it as a “significant to detrimental” risk.
Yet, fewer than ten percent are making managing geopolitical risks a priority in 2025, and one in five said they didn’t know whether their firm regularly audits its supply chain for bribery and corruption.
Organizations without safeguards—especially those with cross-border interests in politically sensitive industries—face heightened risk.
Regular top-down reviews help assess risk tolerance and preparedness for escalating tensions.
Scenario planning, including crisis and communications strategies, is essential for effective risk management.
Still, there are consequences and risks for companies operating solely on domestic soil as well.
Sanctions—an increasingly common tool used to apply pressure on countries, entities, and individuals—have generated fresh media attention since Russia’s war in Ukraine, the reelection of Donald Trump, and electoral changes in the UK, Europe and elsewhere.
Yet, 34 percent of directors believe their company faces no threat of international sanctions, and that number grows to 75 percent for those at companies with operations only in the U.S.
While a domestic company might not face primary sanctions, its suppliers and customers could, highlighting the need for resilient, flexible supply chains to manage disruptions.
Meanwhile, companies with an international footprint should conduct risk assessments, identify red flags and implement necessary compliance measures.
For organizations navigating international sanctions, compliance is critical. Directors cite a range of challenges in this area, including managing compliance with third-party risks, training high-risk parties and educating employees on compliance—all of which are essential.
Sanctions and trade restrictions increase risks to global operations, with violations potentially causing financial losses, revenue declines and reputational damage.
Regardless of exposure levels, boards should mandate robust sanctions and trade compliance programs, including risk assessments, compliance gap analyses, continuous policy and political monitoring, scenario planning and crisis communication exercises.
The increased polarization of the U.S. electorate combined with more intense rhetoric and activist attacks against corporations have created a tightrope for CEOs and executives to walk, as they contemplate when, where and how they should speak out or act on larger societal issues.
According to the survey, 84 percent of directors reported that their CEO had refrained from publicly sharing an opinion that could be perceived as divisive—up from 64 percent when we last asked in 2017. This clearly stems from the fact that 85 percent of directors view “taking a stance” on social issues a bigger risk to the company’s reputation than “refraining from taking a stance.” This proportion is also up compared to 2017 (71 percent).
There has been a continuous shift over the past few years from CEOs being more vocal to less outspoken on issues deemed controversial. As corporate leaders try to get ahead of and mitigate potential reputational risk, they must reflect on how to bring their corporate purpose and values to life in credible, defensible and authentic ways.
At this time, only 18 percent of directors believe a public company board should encourage its C-Suite leaders to speak publicly to reinforce company values, which demonstrates the perceived risk that speaking out creates.
So, how can corporate leaders and boards manage that fine line? By taking proactive steps to better understand the expectations that key stakeholders (including investors, customers, employees, partners and regulators) have and how to bridge potential differences between them.
Given what is at stake and their mandate to reduce corporate risk, it is not surprising that 61 percent of directors polled believe the board and leadership teams should be consulted before any public statements are made, and 81 percent have a policy regarding which individuals, if any, can make public statements on behalf of the company.
This is particularly important since nearly half believe social pressures demanding change do have some impact on strategy. It is also good business to ensure that companies have clear guidelines on who can speak on behalf of the company and what issues are on and off the table for comment.
The adage “Proper preparation prevents poor performance” has never been truer when it comes to reputational risk prevention. Planning matters, and the majority of directors polled believe this kind of action is needed.
Directors are less convinced, however, that they need to approve messages before they go out, which enables leadership teams to have independence. At the same time, 61 percent of board members believe corporate officers need to check with the board / leadership team before making public statements that carry a potential risk for the company.
The takeaway here, according to the survey, seems to be that if the right guidelines are in place and directors feel comfortable with the leadership team, then the risk should be already reduced.
While managing reputation appears squarely in the middle of the top board priorities identified in this survey, how companies manage those top priorities, including pursuing growth strategies, integrating M&A, optimizing financials and operations as well as mitigating cybersecurity and data privacy risk, could easily create reputational risks that could cause unintended disruption or harm to business operations.
The fact that 41 percent of respondents cited ethics or culture-related scandals as holding the risk of significant impact on their companies underscores that boards keep reputation management as a key risk mitigation/prevention strategy while assessing and pursuing business priorities.
This year’s survey revealed that only 11 percent of board members consider shareholder engagement and activism a top priority, a decrease compared to previous years. Similarly, only 7 percent consider shareholder activism “challenging to oversee,” a decrease from 11 percent in 2023.
Several factors could explain this, but one possible explanation is the general belief that improving market conditions reduce the likelihood of activist pressure.
Another reason is that many directors report proactively tracking metrics they believe are important to shareholders. For example, two-thirds report monitoring TSR and executive pay / performance alignment, and 45 percent track evaluations of ROIC as key indicators of a company’s vulnerability to shareholder activism.
Additionally, more than half have increased their interactions with shareholders, perhaps in response to the growing calls from industry experts to strengthen boards’ activism preparedness through proactive communication with investors.
Still, effective activist mitigation goes beyond TSR and involves engaging with activists to address their concerns. As directors continue to indicate that growth, M&A and succession planning are among the most challenging topics to oversee, they should consider capturing shareholder views on these critical issues.
For the first time in years, cybersecurity did not rank as the most challenging issue for directors to oversee. Instead, this year, strategy took the first spot, with 42 percent of surveyed directors selecting it as their biggest challenge, followed by succession planning.
Meanwhile, only 30 percent of directors rate their board’s ability to understand the company’s long-term strategy as “excellent.” Instead, two-thirds ranked it “good” or “average,” evidencing the challenge with today’s long-term view.
Similarly, directors rated their effectiveness on succession planning much lower relative to all other dimensions listed—with only a slim majority rating it “excellent” or “good.”
So, what do boards believe would improve their performance?
Training and education were the most common answers provided by those surveyed, with specialized training for certain members at 39 percent and increased/mandated education for all board members at 38 percent.
Coming narrowly in third place at 37 percent is implementing new tools and technology at the board level for oversight.
Another way boards can optimize the time they have and improve their performance is by reshaping the course of meetings. Management presentations, it seems, are still a thorny issue for board members who feel they are wasting precious time together reading slides.
Our survey also found the growing presence of specific skills among boards, from cybersecurity to HR to AI, reflecting what directors view as the natural evolution of new candidates having worked with digital technologies and dealt with evolving labor and culture dynamics.
In this year’s ranking of the attributes needed to join a public company board, digital knowledge surpassed even strategic planning and financial expertise, which have long ranked at the top of the list.
Board members also expressed the need to hear from more and different members of the C-Suite outside of the CEO and CFO. Over a third (35 percent) want to hear more from the CHRO, and 31 percent want to hear more from the CMO.
Only 7 percent of survey respondents did not list an executive or other employee type from whom they want to get more information.
of directors say they want to hear more from the CHRO
of directors say they want to hear more from the CMO
Since 2002, Corporate Board Member has been surveying public company board members in the U.S. on their governance practices. What Directors Think is our flagship research, which gathers insights from more than 200 directors each year on their priorities, challenges, outlook and impressions of America’s business climate, including what’s changing inside boardrooms around the country.
For this 2025 edition, we partnered with Diligent Institute and FTI Consulting to bring you the findings in this report. The survey was conducted entirely online in September and October 2024. Some of the findings presented here include data from our November edition of the Director Confidence Index, conducted quarterly in partnership with Diligent Institute.
Corporate Board Member, a division of Chief Executive Group, has been the market leader in board education for 20 years. The quarterly publication provides public company board members, CEOs, general counsel and corporate secretaries decision-making tools to address the wide range of corporate governance, risk oversight and shareholder engagement issues facing their boards. Corporate Board Member further extends its thought leadership through online resources, webinars, timely research, conferences and peer-driven roundtables. The company maintains the most comprehensive database of directors and officers of publicly traded companies listed with NYSE, NYSE Amex and Nasdaq. Learn more at BoardMember.com.
Founded in 2018, Diligent Institute serves as the global corporate governance research arm and think tank of Diligent Corporation, the largest SaaS software company in the Governance, Risk and Compliance (GRC) space. Diligent serves more than 25,000 organizations and over 750,000 corporate leaders in more than 90 countries. Diligent Institute is able to tap into that broad network and highlight the diverse perspectives of corporate leaders from around the world.
Diligent Institute produces original research both on our own and in collaboration with partners, including institutions of higher education and thought leaders in the corporate governance space. We produce over a dozen reports each year, ranging from our monthly “Director Confidence Index,” which measures how corporate directors are feeling about the economy, to in-depth reviews of issues such as ESG (environment, social, governance) practices, to our AI-powered “Corporate Sentiment Tracker” that analyzes data from thousands of public sources to discern what’s on the minds of corporate leaders. Learn more at diligentinstitute.com.
FTI Consulting is the firm that the world’s leading corporations call upon when they are facing their most significant challenges and opportunities.
Each practice area of FTI Consulting includes leading experts defined by their depth of knowledge and track record of delivering client value when it matters most. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle—from proactive transformational opportunities to providing rapid responses to unexpected crises and dynamic environments.
Learn more at fticonsulting.com.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals. FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.