Cybersecurity, generative AI and geopolitics at the top of board agendas for 2030
The boards of listed companies in Spain must strategically adapt to keep pace with an increasingly changing landscape characterized by technological disruption, geopolitical instability and society’s growing demand for more effective, plural and responsible governance. So concludes the report ‘The board agenda for 2030' by the Esade Centre of Corporate Governance, in conjunction with PwC, IBM, Mercer, Georgeson, Diligent and Esade Alumni, and presented at the new Esade campus in Madrid on the center’s fifth anniversary.
According to this report, based on a survey of 175 experts and board members of listed companies in Spain, the main priorities for the next decade are cybersecurity (important for 96.6% of respondents), Gen AI (96.5%) and geopolitics (93.7%). In this new scenario, 80.8% of participants envisage an evolution towards “extended boards” featuring advisory board members or board advisors providing specialized external advice in these crucial areas.
“Boards can no longer merely supervise; they must anticipate, interpret and lead the way in a volatile, changing scenario. This report shows that the key to the future lies in the ability to combine technology, diversity and purpose. We must drive a type of governance that is more plural, more prepared and more in touch with the challenges of the real world”, explained Mario Lara, director of the Esade Centre of Corporate Governance and the Esade Madrid campus.
Changes in board composition and operating
Changes to the agenda also entail rethinking the board’s internal dynamics. Some 76.8% expect board members to have to devote more time to their duties although just 29.6% expect their remuneration to increase proportionately. This imbalance, according to the report, rekindles the issue of overlapping directorships, with 65.2% of respondents in favor of stricter limits on the number of overlapping directorships.
The survey also reports a trend towards greater independence and professionalization. More than half of the experts believe that by 2030, at least 50% of board members will be independent, and 57.9%, that independent directors acting as coordinators will have greater powers. Some 64.5% of respondents, however, expect higher numbers of active executives to become independent directors, and for new board members to be younger.
The significant rise of new matters on boards’ agendas will call for companies to renew their directors more quickly. Some 57% of respondents say they expect 25%-50% of their current directors to be replaced in the next five years. Difficulties in finding key talent, regarded as the foremost challenge by 89% of those surveyed, underline the importance of appointment committees in attracting, developing and retaining highly specialized profiles.
Besides being a strategic priority, generative artificial intelligence will change the very dynamics of how boards operate. According to the report, more than 70% of experts feel that this technology will improve the efficiency of directors’ time, make meetings more productive and enhance decision-making. However, 55% warn of possible conflicts between human criteria and machine recommendations that could oblige boards to strike a new balance between professional criteria and algorithmic support. This operational dimension of Gen. AI, still in its early days, constitutes one of the most significant structural changes over the next decade.
New skills, transversal sustainability and emerging dilemmas
The report also features more than 60 qualitative comments by respondents that complete the quantitative picture with more nuanced insights into the future of corporate governance. The new issues include particularly the need to rethink sustainability from a more transversal, comprehensive approach with greater emphasis on its social dimension. Mention is also made of the need to foster greater diversity with regard to age, professional experience and international track record.
The experts also warn about the dilemmas that will mark the coming years. On the one hand, standpoints critical of possible over-regulation are at odds with proposals calling for greater regulatory safeguards to ensure that boards remain truly independent. On the other hand, the jury is out about the balance between technical specialization and global strategic vision, and likewise the limits between supervision and operational management. The rifts between formal independence and actual autonomy, and the board’s role regarding shareholder activism, complete the landscape of ever-evolving challenges.
