In today’s landscape of persistent macroeconomic uncertainty, the role of a director has never been more critical — or more under scrutiny. A recent survey by Spencer Stuart of 2,400 CEOs revealed a concerning insight: Less than 24% feel their boards are effectively supporting them in navigating today’s volatile environment.
With escalating geopolitical risks, the accelerating AI and technology revolution and ongoing economic shiftsbecoming the “new normal,” directors must take deliberate, strategic action to become true partners to CEOs.
The principles outlined here apply broadly to boards, including both founder and multigenerational owners and private equity-backed firms. While the composition of board members varies, founder-led and multigenerational boards lean into operational expertise and long-term vision, while heritage-majority private equity boards lean into financial oversight and value creation aligned with specific investment objectives.
According to Herman Bulls, international director and vice chairman, Americas, of JLL; chairman of the board of Fluence; vice chairman of the boards of USAA and American Red Cross; and member of the boards of Host Hotels & Resorts, Comfort Systems USA and Collegis Education, “In times of uncertainty, the most effective boards are those that listen deeply, think strategically and engage as true thought partners to management, balancing governance with value-creation.”
So, what specific steps can board directors take to change this dynamic and ensure CEOs feel fully supported?
Foster a culture of trust, candor and authenticity in the boardroom. According to Chuck Cohen, managing director of Benco Dental, “Trust is hard to build in good times and even harder to build in uncertain times. So, hopefully, directors and CEOs have behaved over the years in a way that has made deposits into the ‘trust account’, so that they can make withdrawals when times are tough or uncertain.”
The most effective boardrooms operate with mutual trust, psychological safety and authentic dialogue. It’s the board chair’s role to ensure every voice is heard and diverse perspectives are encouraged and respected.
Dan Castles, CEO of Telestream, believes transparency between the CEO and the board is the most important dynamic of an effective boardroom.
“Without all cards on the table, any perspective developed at that level is somewhat limited in its potential effectiveness,” says Castles. “A board has to encourage this transparency, of which the most important element is how they react when the CEO shares news that is not positive in nature.”
Cohen believes confidentiality of discussions between the board and CEO cannot be underestimated.
“Confidentiality is key to building trust, so CEOs and all board members know that what’s said in the boardroom stays in the boardroom,” says Cohen. “CEOs don’t need to worry about directors talking outside the boardroom to others. It’s about respect.”
Think and act like an owner-operator. Brantley Barrow, chair of Adolfson & Peterson Construction, believes risk should not be avoided; it should be capitalized on.
“It is so important not to avoid risk, but to properly manage it, if you are to grow a business and meet the challenges of today’s business environment,” says Barrow. “As a board member, you have to think and operate like it is your business.”
Cindy Burrell, president of Diversity in Boardrooms, feels board members should take a similar approach to strategy.
“Be the board director who is learning and thinking about the company’s strategy and potential — prior, during and after the meeting,” says Burrell says.
Board members must track key company progression and market movements and stay actively informed instead of depending on quarterly board deck reviews. They should develop a deep grasp of the company’s unique value proposition, competitive landscape, strategic priorities and financial drivers and performance. Directors should understand and respect performance as if they were held accountable to drive it. An owner-operator mindset enables directors to ask better questions, provide more valuable input and support the CEO with deeper insight.
Prioritize growth and innovation over compliance-only governance. Board agendas should prioritize strategic growth, innovation and long-term value creation, alongside risk management and oversight, according to Doug Leidig, CEO of Asbury Communities. “A forward-looking and strategic board, when aligned with a CEO who has the same qualities, gives the best chance for an organization to have sustainable success.”
Continuously and actively evolve the board composition. Skills, experience and values matter. Board chairs must regularly review and strategically update the board matrix and the directors, ensuring alignment with today’s challenges and tomorrow’s opportunities.
Key board matrix areas include:
Business operating experience. How many directors have built, scaled or transformed a business, either within an established company or through greenfield ventures? Directors with this hands-on experience bring crucial growth know-how, empathy, creativity and agility to the boardroom.
Entrepreneurial and risk profiles. Boards dominated by conservative risk-takers can unintentionally stifle innovation and “tie down” company CEOs from executing growth and tilling a growth culture. Chairs should seek a balanced mix of directors, including those that can think in an entrepreneurial way and are comfortable navigating ambiguity and championing bold moves when needed. Test this with a detailed review of what initiatives prospective directors have led and driven.
Rick Winston, director and audit committee chair of BJC HealthCare, believes the board must do more than safeguard the status quo. “The board must challenge the CEO and management team to innovate and dismantle complacent business models, while embracing creative disruption to ensure the enterprise remains agile, relevant and ahead of the market.”
Industry and functional diversity. A board with varied industry backgrounds — as long as each member thoroughly understands the company’s business — will raise more innovative questions and enrich strategic dialogue. Include expertise in technology, AI, cybersecurity, analytics, contingency planning and emerging markets to future-proof board effectiveness.
Cultural and values alignment. Skills alone are not enough. Directors must also align with the core values and mission of the company to foster cohesive and constructive governance. According to James White, chair of The Honest Company and director of Cava, Greenlight, Schnuck Markets and The Bay Club Company, “There’s never been a more challenging time to be CEO. A strong and culturally aligned board is an imperative.”
Board dynamics matter as much as board composition. A culture where challenging questions are welcomed and directors feel empowered to speak candidly enables better decision-making and stronger support for the CEO and executive team.
Directors must stay informed, relevant and future-ready. Boards that embrace lifelong learning and scenario planning are better positioned to support CEOs through uncertainty.
The traditional boardroom motto of “noses in, fingers out” applies to the need for directors to avoid over-leaning into “driving” or asking for detailed data negatively impacting ongoing operations. Or as Leidig says, “When everyone is trying to ‘run’ the company, progress, innovation and success are stalled.”
However, CEOs do want directors to be alert, on-point, strategic partners with them.
As one new CEO candidly remarked in a Financial Times article, “I was surprised at how ill-informed the board is. Where is the expertise?”
Boards Must Rise to the Moment
The board is not just a governance mechanism. It is a strategic asset. By adopting an active, informed and future-focused approach, directors can become invaluable allies to their CEOs.
In a world defined by volatility, the best boards will be those that evolve quickly, challenge wisely, support consistently and lead courageously.