5 board governance trends for 2025 – adapting to evolving expectations

5 board governance trends for 2025 – adapting to evolving expectations

5 board governance trends for 2025 – adapting to evolving expectations

Blog

Blog

22 Nov 2024

22 Nov 2024

As businesses and markets head into the new year, so too do the expectations placed on the board. In 2025, key trends reflect the growing complexity of organisational oversight and the influence of individuals. In this article, we explore five trends we believe will be shaping boardrooms around the world next year.

As businesses and markets head into the new year, so too do the expectations placed on the board. In 2025, key trends reflect the growing complexity of organisational oversight and the influence of individuals. In this article, we explore five trends we believe will be shaping boardrooms around the world next year.

1. Increased focus on board evaluation benchmarks

Board evaluations have long been a cornerstone of good governance but the spotlight is now on measurable outcomes. In 2025, organisations will be leveraging benchmarks to compare their board performance against peers and industry standards.

Boards are moving beyond qualitative assessments, employing data-driven tools to gauge effectiveness, identify skill gaps and uncover opportunities for growth. This benchmarking approach not only fosters accountability but also provides boards with actionable insights to remain competitive in an ever-changing business landscape.

Key takeaway: Benchmarking transforms board evaluations from routine exercises into strategic enablers of continuous improvement.

2. Board evaluations alone are not enough – continuous improvement takes center stage

While board evaluations provide valuable snapshots, they are no longer sufficient on their own. The trend in 2025 is to treat evaluations as starting points rather than endpoints. Continuous improvement throughout the year will be taking a more central role.
Boards are adopting iterative feedback loops, regular performance check-ins and targeted development initiatives to ensure they remain agile and effective. Whether through educational sessions, coaching or scenario planning, the focus is on embedding a culture of continuous learning and adaptability within the boardroom.

Key takeaway: A commitment to ongoing improvement enhances board agility, equipping directors to navigate emerging challenges and opportunities.

3. Focus on the board as a whole while individual directors face increased scrutiny

The board as a collective entity remains central to governance discussions but in 2025, individual accountability is gaining prominence. Stakeholders are taking a closer look at the performance, engagement and contributions of individual directors.

This shift is driven by the recognition that a high-performing board requires all its members to deliver value. Many organisations are adopting individual director assessments, which evaluate skills, preparedness and alignment with the organisation’s strategic goals. However, skills isolated alone won’t be enough. Boards are beginning to explicitly assess and address board dynamics – the interpersonal relationships, communication styles and dynamic of the group.

Effectiveness stems equally from decision-making and the ability of directors to work well together. By integrating dynamics into individual and collective evaluations, boards can uncover hidden barriers to collaboration and ensure a cohesive, high-performing team.

Key takeaway: Boards are increasingly balancing collective performance with the need to evaluate and support individual directors while fostering healthy interpersonal dynamics to unlock their full potential.

4. Skill diversity brings a broader spectrum of expertise and attributes

The conversation around diversity in boardrooms has expanded beyond gender and ethnicity to encompass skills, experiences and attributes. In 2025, the emphasis is on ensuring that boards are equipped with the expertise needed to address complex and dynamic challenges.

From technology and cybersecurity to sustainability and international markets, the range of skills required has widened. Boards are actively seeking directors with diverse experiences to bring fresh perspectives and innovative solutions to the table. This shift acknowledges that skill diversity strengthens decision-making and enhances a board’s ability to oversee multifaceted issues.

Key takeaway: A diverse mix of skills and attributes is essential for a board’s ability to navigate today’s complexities and prepare for the future.

5. Sustainability goals and SFDR transition plans under review

The revision of the Sustainable Finance Disclosure Regulation (SFDR) signals a pivotal moment for European businesses. In 2025, boards are expected to align sustainability goals with concrete and measurable transition plans.

This alignment goes beyond regulatory compliance; it’s about embedding sustainability into the fabric of the organisation’s strategy. Boards are taking a leadership role in ensuring that sustainability initiatives are not only aspirational but also grounded in actionable steps. Transition plans are being evaluated for their feasibility, metrics and alignment with long-term value creation.

Key takeaway: Boards that integrate sustainability into strategic planning are better positioned to meet regulatory demands and stakeholder expectations.

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