Where Boards Should Put Their Focus in 2024
The economy and AI are top concerns for boards in the coming year, according to a new report. But boards should also take a look at their own structures, and those of the employees they direct.
As a new year begins, a lot of staff leaders are understandably eager to hit the ground running. The good news is a lot of boards are too.
The National Association of Corporate Directors’ 2024 Governance Outlook Report, published last month, suggests that board leaders are very eager to follow through on their strategic plans. According to NACD’s survey of more than 500 U.S. corporate directors, 80 percent of respondents say that “oversight of strategy execution” and “oversight of strategy development” is important or very important—the most popular improvements surfaced by the survey.
Moreover, those leaders are confident that they’ll have the financial wherewithal to manage through those improvements. Though respondents are still concerned about a looming recession, the percentage of those anticipating one has dropped substantially, from 65 percent in 2022 to 29 percent now; similarly, 62 percent of respondents say they anticipate the U.S. economy will experience a “soft landing” in the coming year, compared to 29 percent last year.
What to do with all that optimism and strategic focus? Getting smarter about technology is a big piece of it: The report found that concerns about AI and cybersecurity are paramount, and that boards are still working through its challenges. For instance, 68 percent of respondents had no answer to the question of “how the company mitigates AI-related risk.” As AI-driven tools expand and begin making their way into familiar, everyday software, and as more organizations try to develop ethical guidelines around the use of AI, the conversation will only grow more necessary.
But many of the challenges facing boards are more evergreen. Board diversity remains a challenge, and the NACD report includes a section spotlighting the dearth of Latino directors, and the lack of proactive diverse board recruiting efforts in general. Success on this front, as the report puts it, “means reaching out to a broader array of networks, educational institutions, and professional organizations.”
A similarly enduring challenge for boards is building an organization that has a staff fit for purpose. HR matters are often considered too small-bore for board discussions, but talent—or the lack of it—is a strategic challenge, and an association can’t make good on a board’s ambitious strategic plan if it doesn’t have the staff to execute it. As the NACD report bluntly puts it: “As for talent, there simply isn’t enough walking the streets.” And there are plenty of other associations out there competing for it.
How can boards have a meaningful talent conversation? It can start by exploring the ways work has transformed and whether the current org chart acknowledges it. The NACD report calls out some of the challenges: leadership development, technology competency, core values, effective onboarding, work styles of different generations, and more.
Those are important questions for association boards to discuss when it comes to their staff’s workforce. But they’re essential for the association’s volunteer corps, and the board itself. What makes board service attractive to the most diverse, creative, strategic, and tech-savvy leaders possible? If your board doesn’t have a good answer to that question, a good new year’s resolution for 2024 is to get on the path to finding one.