As we start to approach the end of 2024, it is important for leaders, particularly board members, to look ahead to the next year. 2025 will bring continued and new challenges boards will need to navigate to maintain the success of those businesses.
From climate change to geopolitical tensions, AI to the diversity of board members, the board will face changes around how they operate as well as obstacles for the business they support.
Safe and Ethical AI
In 2025, it will become even more important for the board to understand the risks and potential impact of implementing AI into the business. While board members do not need to be technical experts, it is important they understand the basic technology and its implications for the business’ product. Boards will be responsible for preparing businesses for risk prevention and response.
Beyond the wider implications for the business, board members have a duty to due diligence around AI. Such steps may include participating in steering groups, supporting the creation of AI policies and ongoing training to create an ‘AI culture’ in which understanding and ethical safety are prioritised.
While 2024 has seen many businesses adopt AI technology, the role of the board will be to protect the business from potential risks and ensure good AI standards are in place.
Climate Action
As a board director and non-executive director, I have seen an increase in businesses considering sustainability, paired with increasing legal requirements to disclose climate-related reports. Pressure from clients, partners, and investors has moved climate action up the board’s priority list.
Boards will increasing support businesses in combining the climate strategy with the business strategy. For too long, climate action has been viewed as a distant problem, but by breaking climate-related action into short-term targets, integrating climate into risk management activity, and tying climate performance to renumeration and incentives, boards can help businesses take real steps of improvement.
Similarly to AI, board members do not need to be experts on climate action but can appoint sustainability experts and promote understanding within the business, in order to create a culture aligned to the climate agenda.
Diversity of the Board
While there has been slow progress regarding the diversity of boards, both in terms of identity and experience, I hope progress will accelerate in 2025. The combination of changes to the workforce and workplace, changing attitudes to the importance of business values, and a wealth of data that demonstrates the tangible benefits to diversity, will accelerate change on the board between now and 2030.
As well as improving the diversity of the board, having a board that is aware of the changes occurring to the workplace will promote a better business culture and improve diversity across the business.
Boards face many challenges, and these have been growing in prevalence. 2025 will see boards guiding their businesses more proactively when it comes to safe and ethical technology, climate strategies, and improving board diversity. If any board members are looking for additional support when facing the challenges ahead, please don’t hesitate to get in touch.
