New global survey by Heidrick & Struggles, BCG, and INSEAD,
reveals growing confidence in sustainability governance, but boards
and CEOs still lack confidence in each other's leadership
LONDON, Nov. 19,
2024 /PRNewswire/ -- Heidrick &
Struggles (Nasdaq: HSII), a premier provider of global
leadership advisory and on-demand talent solutions, has teamed with
Boston Consulting Group (BCG) and the INSEAD Corporate
Governance Centre, to publish a report exploring how boards are
responding to complex trends and disruptions they currently face.
Boards and Society: How Boards Are Evolving to Meet Challenges
from Sustainability to Geopolitical Volatility reveals
boards have made meaningful advances to address sustainability
topics, but are less confident when it comes to their understanding
of other issues such as the rising importance of generative AI,
intensifying trade and geopolitical disruptions. These four
interconnected pillars are forcing directors and CEOs to navigate
an increasingly unpredictable environment filled with conflicting
and often politically charged demands.
Additionally, the report shows evidence of simmering discord
among company leadership on how best to enhance competitiveness
amid the challenges they face.
Key Findings from the Boardroom
- 77% of boards believe their company has a responsibility to
address sustainability concerns
- 36% feel prepared to leverage the disruptive potential of
AI
- 37% believe their company has a sufficient strategy around
geopolitical risk
- 29% of directors do not have faith in their CEO to navigate
uncertainty
- 26% of CEOs do not have faith in their board's
effectiveness
- Half of respondents are not confident their company is equipped
to identify new threats and opportunities related to
sustainability, generative AI and geopolitics
The report reveals that 77% of the global board members surveyed
believe their company has a responsibility to address societal
concerns, although more than half (54%) believe that business
objectives should remain the primary focus. In contrast to this
enthusiasm around sustainability, only 36% of directors feel
prepared to leverage the disruptive potential of AI, while just 37%
agree that their companies have sufficient strategies in place to
manage geopolitical risks.
These findings highlight an urgent need for greater balance
between traditional governance with forward-looking strategies and
increased investment in board competency. Despite lower levels of
confidence for the prevailing risks and emerging technologies of
our time, it is encouraging to note that more than 60% of directors
stated that their boards are "leaning in" on risk management,
suggesting a desire to tackle these challenges head on, regardless
of their complexity.
Lack of Confidence Amid Growing Complexity
In a
concerning indication of division within the boardroom, the new
report reveals that 29% of directors lack confidence in their CEO's
ability to navigate disruption and boost long-term value.
Meanwhile, a comparable number of CEOs (26%) are equally skeptical
of their board's effectiveness, reflecting an increasing tension
between top leadership teams grappling with a more complex and
diverse range of issues than ever before.
The report also finds that roughly half of directors are not
confident their company is equipped to identify new threats and
opportunities related to sustainability, generative AI and
geopolitics, nor are they able translate them into a competitive
advantage. As global business landscapes continue to shift, the
ability of boards to stay cohesive, align with leadership, and
adapt to new challenges with innovative corporate strategy will be
more critical than ever. Effective governance that embraces both
foresight and resilience will be key in turning these disruptions
into opportunities, allowing businesses not only to survive but to
thrive in an increasingly volatile world.
Commenting on the findings, Jeremy
Hanson, Partner with Heidrick & Struggles and Co-author
of the report, commented: "While it is encouraging that
boards are stepping up on sustainability, this year's survey
reveals tensions between directors and management regarding each
other's capacity to navigate disruption. With so much at stake—and
an increasing complexity to unpack—alignment between board
directors and management isn't just a best practice; it's essential
for addressing both today's challenges and those of the future.
Importantly, alignment does not mean boards should shy away from
constructive debate with management. In fact, fostering open, even
difficult, conversations is crucial for boards to reach resilient,
well-rounded decisions in today's demanding environment."
Sonia Tatar, Executive
Director of INSEAD Corporate Governance Centre, said,
"Boards today can benefit from moving from being reactive to
proactive. Beyond understanding disruptions, they can focus on
looking ahead—anticipating future shocks and potential risks and
finding ways to capitalize on the emerging trends to leverage
opportunities. By translating insights that inform decision-making
into strategic actions, they will be better positioned to guide
companies in becoming more resilient and navigating change
effectively."
Also commenting on the report, David
Young, Managing Director and Senior Partner of BCG added:
"Boards are facing new and increasingly complex challenges,
amid geopolitical uncertainty, rapid advances in technology, and
continued concerns over the impact of climate change. But boards
have made notable progress in tackling sustainability--and now
there is opportunity for them to learn from these efforts as they
engage in deep conversations with executive leadership to confront
this expanding agenda."
Media Inquiries:
Heidrick & Struggles:
heidrick@cw8-communications.com
BCG: Gregoire.Eric@bcg.com
INSEAD: news@insead.edu
About Heidrick & Struggles:
Heidrick &
Struggles (Nasdaq: HSII) is a premier provider of global leadership
advisory and on-demand talent solutions, serving the senior-level
talent and consulting needs of the world's top organizations. In
our role as trusted leadership advisors, we partner with our
clients to develop future-ready leaders and organizations, bringing
together our services and offerings in executive search, diversity
and inclusion, leadership assessment and development, organization
and team acceleration, culture shaping and on-demand, independent
talent solutions. Heidrick & Struggles pioneered the profession
of executive search more than 70 years ago. Today, the firm
provides integrated talent and human capital solutions to help our
clients change the world, one leadership team at a time. For more,
please visit www.heidrick.com
About BCG:
Boston Consulting Group partners with
leaders in business and society to tackle their most important
challenges and capture their greatest opportunities. BCG was the
pioneer in business strategy when it was founded in 1963. Today, we
work closely with clients to embrace a transformational approach
aimed at benefiting all stakeholders—empowering organizations to
grow, build sustainable competitive advantage, and drive positive
societal impact.
Our diverse, global teams bring deep industry and functional
expertise and a range of perspectives that question the status quo
and spark change. BCG delivers solutions through leading-edge
management consulting, technology and design, and corporate and
digital ventures. We work in a uniquely collaborative model across
the firm and throughout all levels of the client organization,
fueled by the goal of helping our clients thrive and enabling them
to make the world a better place.
About INSEAD:
As one of the world's leading and
largest graduate business schools, INSEAD brings together people,
cultures, and ideas to develop responsible leaders who transform
business and society. Its research, teaching and partnerships
reflect this global perspective and cultural diversity.
With locations in Europe, Asia, the Middle East, and North America, INSEAD's business education and
research spans four regions. 159 renowned Faculty members
from 41 countries inspire more than 1,500 degree participants
annually in the Master in Management, MBA, Global
Executive MBA, Specialised Master's degrees (Executive Master in
Finance and Executive Master in Change) and PhD
programmes. In addition, more than 18,000 executives participate
in INSEAD Executive Education programmes each
year.
INSEAD continues to conduct innovative research and innovate
across all programmes. The organisation provides business leaders
with the knowledge and awareness to operate anywhere. Its core
values drive academic excellence and serve the global community as
The Business School for the World. For more information,
please visit www.insead.edu.
About INSEAD Corporate Governance Centre:
The
INSEAD Corporate Governance Centre (ICGC) has been actively engaged
in making a distinctive contribution to the knowledge and practice
of corporate governance globally. Its vision is to be the leading
center for research, innovation, and impact in corporate
governance. Through its educational portfolio and advocacy, the
ICGC seeks to build greater trust within the public and stakeholder
communities, so that businesses are a powerful force for
improvement, not only of economic markets but also for the global
societal environment. For more, visit
www.insead.edu/centres/corporate-governance.
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SOURCE Heidrick & Struggles
