In a world where risks are increasingly complex and interconnected, the governance role of the board must evolve to embrace change, oversee the requisite level of risk taking and drive resilience and innovation rather than simply maintaining stability. This is what will differentiate board directors that successfully steward organisations over the next 10 year and beyond, from those that don’t.
The interconnected nature of risks today—whether technological advancements and disruptions, geopolitical tensions, or climate and environmental crises—means that effective governance cannot be static. It must be dynamic, proactive, and embedded in the strategic fabric of the business. In this context, boards must reaffirm their long-term stewardship role, enhance boardroom dynamics, and ensure that executive incentives align with the company’s risk appetite and long-term goals.
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In today’s volatile business landscape, boards are overseeing an increasingly complex web of risks, demanding that boards become comfortable with the uncomfortable, champions of long-term organisational health and responsible proponents of innovation in the face of uncertainty. To do this, they must think beyond immediate concerns such as quarterly results and political headlines. Yet WTW’s 2025 Board Stewardship Survey found that 40% of board members don’t spend enough time on strategic planning for the long-term with time largely on financial results and reporting. And only 23% of executives are confident their organisation’s strategy will remain resilient to risks that might emerge in the next 10 years (WTW’s 2024 Emerging and Interconnected Risks Survey).
The same survey of executives found the top five emerging risks for organisations were AI, Cyber, Geopolitical, Climate transition and regulatory changes (which aligns to the top 5 risks that boards told us keep them awake at night). Furthermore, WTW's 2025 Directors and Officers Liability Survey found that Health and Safety was the top-ranked risk facing directors globally (for the second year running), pointing to the increasing importance of managing both physical and mental wellbeing and the board’s people governance role. Ultimately, the nature and level of risks will differ by company and individual, but what is consistent for boards is the challenge of how these risks (and opportunities) interact. For example:
These are some of the questions that forward-thinking boards will be asking to ensure they are future proofing their organisations.
Key Actions for Boards:
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As the business landscape continues to shift rapidly, it’s no longer enough for boards to focus solely on the technical skills of their members. The key to effective governance is ensuring the right composition, combination of perspectives, culture and dynamics that enable boards to challenge, embrace change and innovate. This goes beyond merely meeting diversity quotas, it’s about fostering a collective intelligence in the boardroom that is agile and capable of both navigating today’s challenges and taking a long-term perspective in the face of uncertainty.
As John Bremen and National Association of Corporate Directors (NACD) have explored, ‘effective boards develop new skills to thrive while maintaining the traditional skills necessary for good governance’. This includes skills in emerging risk areas such as human capital, cybersecurity and the green transition. However, WTW’s Board Stewardship Survey (2025) found that only half (51%) of respondents have confidence in the skills of fellow board members to provide effective oversight over climate-related risks and opportunities; and this reduces to less than one-third (28%) when asked about other environmental risks such as nature and biodiversity loss.
Beyond individual expertise, the composition and dynamics of the board itself are equally important – there is little use in individual members possessing certain skills if they can’t be drawn upon constructively in boardroom dialogue. Effective governance requires the ability to collectively challenge, innovate and make decisions - often in the context of incomplete data and many unknowns. This is where critical leadership skills that Bremen highlighted are essential for honing the right boardroom culture: courage, resilience, adaptability, sensemaking and vulnerability.
Similarly, it may be necessary to revisit the board structure to facilitate the necessary time on material business issues (for example, is there a need for a standalone risk and/or sustainability committee?). Indeed, the board’s key role in risk management was reaffirmed by Provision 29 in the 2024 UK Corporate Governance Code.
Key Actions for Boards:
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As Board governance focuses on resilience and innovation, the question of how to balance futureproofing with risk-taking becomes paramount. This highlights a key tension: the UK’s tendency towards “safetyism” in corporate governance, which contrasts with the more risk-tolerant stance often seen in the U.S. Caution is understandable in the face of rising risks and complexity, but it also risks stifling the innovation necessary to stay competitive.
Recent trends in the UK corporate governance landscape suggest a slight easing of bureaucratic burdens, empowering boards to take more calculated risks in order to boost the UK’s competitive global standing. For example, the Capital Markets Industry Taskforce has made powerful arguments for change in this area and we have since seen influential guidelines surrounding executive compensation evolving to allow for more flexibility.
Executive compensation is a key governance mechanism for boards and today’s risk landscape requires boards to rethink how they incentivise executives to encourage sustainable value creation and calculated risks that align with long-term strategy. Early insights from the 2025 AGM season in the UK showed a continuation of bold moves in executive remuneration policy changes, largely proposed with the rationale of ‘increasing global competitiveness’. This reflects some divergence from UK pay norms with more focus on a business-first approach and perhaps greater openness to risk taking. However, it is critical for boards to thoughtfully consider the right incentive design for them, not to blindly follow market practice, whilst maintaining a view of evolving governance and investor expectations.
Key Actions for Boards:
The modern business landscape demands a new approach to governance. Boards must shift their focus from simply managing stability to driving long-term value creation, innovation, and resilience. By revisiting their stewardship role, rethinking board composition, skills and dynamics, and aligning executive incentives with sustainable growth, boards can navigate the challenges ahead while positioning their organisations for success in an uncertain world.
