Business leadership efforts in 2024 will be impacted by a series of unconventional developments.
A series of unconventional developments are likely to impact business leaders’ initiatives in 2024. These go beyond the usual topics such as shareholder activism, cybersecurity, cryptocurrencies and ESG . Rather, they reflect a number of unique ethical, economic, technological, regulatory, global, and political concerns poised to affect business leaders in significant and potentially unforeseen ways.
1. Coping with continued volatility. Directors must confront the tactical and strategic implications of continued political, social, global, economic and regulatory volatility. This situation will be partly explained by the prospect of a very divisive electoral process in 2024. This may also include concerns related to economic growth; international conflict; income, racial and gender inequalities; continued inflation and continued societal fragmentation. To meet these challenges, directors will need to demonstrate increased attention and closer interaction with management.
2. Recalibrate the board/management dynamic. Directors and officers will need to reconfirm their respective roles and relationships after a year of internal tension caused by new pressures on directors to be more engaged and related concerns from executives about board micromanagement . Clarity will be sought regarding decision-making, as the distinctions between what is the responsibility of the board and what is the responsibility of management have become blurred.
3. Boardroom culture. A growing appreciation because the positive contributions of culture to governance effectiveness will motivate boards to overcome existing and potential barriers to board collegiality. This may include reassessing the ground rules for conducting board business; activate all voices of the board of directors in favor of constructive discussions; help the board resist stress and discord in a context of disagreement; establish clear expectations regarding the conduct of directors; and help attract and retain the best leaders.
4. Board Oversight of AI. External developments will add urgency to the board’s efforts to formalize its role in the company’s acquisition, development and implementation of artificial intelligence. This would include internal structures for board training, oversight, risk prevention and regulatory compliance. Leaders will also need to confront the internal philosophical conflicts between the benefits of AI and how quickly it should be deployed, and the risks of AI and the need to ensure it is deployed responsibly.
5. Women in the workplace. Business leaders will be forced to overcome complacency with progress Workforce culture issues for women, given the perceived fragility of these achievements. Particular attention should be paid to ensuring gender parity for women in middle management positions, whose opportunities for advancement are limited. Leaders will also be challenged to address persistent myths about the status of women in the workplace (e.g., women are less ambitious than men), in order to alleviate persistent barriers to their organizational advancement.
6. The social voice of the company. Growing political polarization will prompt boards to more closely monitor the extent to which the company (directly and through its CEO) exercises its social voice. Concerns about negative publicity, reputational damage to its consumer base, employee backlash, and retaliation from influential sources can temper a company’s commitment to corporate social responsibility . They can also increase the risk associated with a CEO’s public profile. These problems may particularly arise in relation to unusually controversial political, economic, social, cultural and global issues.
7. Codes of good conduct. Leaders will seek to become more closely involved in their code of conduct as applied to directors, officers and other key representatives of the company. This will involve a review of the appropriate scope of the code; an increased appreciation of the role of the code in supporting desired conduct; increased awareness among leaders of its magnitude and. interpretation; how the code is communicated within the leadership ranks; and the fairness and fairness with which alleged violations of the code are evaluated and addressed.
8. Composition and renewal of the board of directors. Notable new data will encourage boards and their nominating committees to adopt a long-term philosophy of board composition, to better ensure the availability of the core skills needed to meet future challenges. Such efforts may include placing greater emphasis on essential director qualifications, such as experience in business strategy; depersonalized succession planning for directors; targeted use of age and term limits; discreet application of “offshoring” mechanisms; and “fitness to serve” policies.
9. Corporate responsibility. The growing, albeit subtle, weariness of organizations with corporate compliance expectations must be offset by recognition of the government continues corporate anti-fraud policies and emphasis on individual responsibility. Leaders will be required to set a new “tone at the top” that incorporates both government-promoted executive pay-based compliance incentives and a consistent message to employees at all levels about the priority of compliance. company committed to ethics and honesty.
ten. Informed risk taking. Companies’ increasing pursuit of seismic and other “bet the ranch” transactions will increase expectations for board oversight of strategic and transactional risks. Although informed risk-taking is an accepted practice among corporate executives, recent court decisions, regulatory policies, and economic implications combine to highlight the board’s role in ensuring responsible risk analysis. Transaction risks, particularly with respect to collaborations, ventures and innovations that offer extremes in risk and reward.
