The early part of any year is of course the time for looks ahead and 2025 is no different. One publication that sought to provide private company directors with an advance view of what is coming down the pike is Private Company Outlook: Governance from Deloitte Private. According to the publication, which was released in July 2024 and asked 100 C-level private business leaders about their outlook regarding business priorities over the immediate future, AI and technology investment are the top leadership priorities challenging boards at this time.
In the area of AI, 79% of respondents say their organization are either actively using AI or beginning to pilot it, while 50% of those surveyed called “determining the use of AI in the organization” a top AI-related leadership priority for the next 12 months. Forty-nine percent of respondents said the same about “reskilling/upskilling or training the workforce for the use of AI” and an identical percentage identified “training/education for board members about AI” as an urgent need.
Since it was cited as a top priority, it should come as no surprise that “emerging technology/AI” was revealed as the most important competency required to strengthen private company boards, with 43% of respondents stating that they were in need of AI-centric directors. Also ranking high on the list of needed competencies was marketing expertise (36%) and strategy (30%), while cybersecurity was only cited by 12% of respondents.
When looking at the all-encompassing risks that are presenting a challenge to private company boards, two-thirds of those responding stated that climate change was a macro risk that would loom large. Also receiving a vote from a majority of respondents was market competition (52%) and pace of digital transformation (50%).
Private companies that are looking to emulate the best practices of public company governance might also be wise to keep track of the governance trends that are challenging global corporations, as they often have a tendency to present issues for privates, even if it is on a smaller scale. With this in mind, Russell Reynolds recently released Global Corporate Governance Trends for 2025, with details on the issues challenging companies in regions such as Australia, India, the United Kingdom and, of course, the United States.
According to the U.S.-focused segment of the report, the corporate governance trends set to challenge companies and boards this year include America’s evolving political and regulatory landscape, continued and increasing shareholder activism, and the polarizing ESG and DEI landscape. Also cited was the challenging landscape and changing priorities around board diversity and the need to take a closer look at executive security after the murder of UnitedHealth CEO Brian Thompson.
PwC’s report, “What’s Important to the Board in 2025,” took a look at five topics that continue to emerge as agenda items for boards three months into the year. Those focus points are board governance, risk, stakeholder engagement, technology and sustainability. On board governance, the report stresses the importance of coming up with the correct board composition and leveraging board assessment and refreshment to achieve a balance of experienced leaders and emerging skill sets. Citing a statistic from their own PwC 2024 Annual Corporate Directors Survey that states that just 15% of directors feel their boards should spend more time on crisis management, the authors warn of overconfidence on behalf of directors who must be ready for disruptions such as extreme weather, cyberattacks and political unrest.
It is just these sorts of business model disruptions that are identified by the National Association of Corporate Directors in its latest Trends and Priorities Survey. Of the 251 individuals surveyed, 29% of respondents cited “growing business model disruptions” as one of their five most significant trends to keep an eye on. Six trends received more votes: shifting economic conditions (51%), regulatory requirements (46%), cybersecurity threats (41%), competition for talent (37%), geopolitical volatility (31%) and AI (30%). One of the report’s most interesting statistics came as a result of asking directors “most sought after characteristic” needed in the board’s next recruit. When asked whether the board needed “general business leadership experience” or “individuals with specific expertise,” 67% voted for the latter. So, the specialist vs. generalist debate lives on!