Driving progress is the top-cited strategic precedence for public firm board administrators within the yr forward, in accordance with the 2024 BDO Board Survey. With financial coverage (33%) and inflation (31%) famous as administrators’ high points within the 2024 presidential election, elevated investing in rising applied sciences and synthetic intelligence (AI) seems to emerge as a method to offset monetary pressures and drive high line progress.
The survey of practically 250 administrators finds that innovation represents each a big organizational alternative and threat, and boards are taking motion to deal with each: Seventeen p.c of administrators point out that advancing using rising expertise is a high strategic precedence, whereas lagging implementation of rising expertise (27%) is a top-cited threat. On the similar time, a majority of administrators (51%) will enhance funding in rising expertise and 41% will enhance funding in cybersecurity, information privateness, and governance over the subsequent yr. One quarter say cyberthreats and incidents are a big threat to their enterprise.
“Administrators have each the chance and accountability to information administration’s execution of technique to ship on sustainable progress metrics whereas minimizing threat to the group,” stated Amy Rojik, Nationwide Managing Principal, Company Governance, of BDO USA. “For many, the trail to reaching these goals will embrace funding in rising applied sciences to optimize operations and aggressive standing however not with out cautious consideration of implementation impacts on the group.”
Expertise and Monetary Threat in Focus as Oversight Tasks Increase
When requested concerning the governance course of boards count on to spend probably the most time on in 2025, 31% of administrators say enterprise threat administration (ERM), intently adopted by 30% who say innovating the company technique. Relating to ERM, boards cite a variety of serious issues for the yr forward, together with expertise acquisition (28%), recessionary declines in demand (27%), and liquidity or entry to capital issues (26%). Monetary well being stays high of thoughts throughout boardrooms as administrators search to fund quite a few mission-critical priorities and safe the fitting expertise to drive progress in a nonetheless unsure financial local weather.
As important enterprise dangers and alternatives proceed to evolve, a extremely functioning and deliberately structured board is essential. Administrators report spending an annual common of 285 hours on their most difficult board, with roughly 30% of that point in board and committee conferences, 30% reviewing supplies and researching points, and 40% partaking with others exterior of the boardroom.
Generative AI Threat & Reward
Generative AI can be a governance focus, with administrators pursuing useful use circumstances and mitigating a variety of dangers. Roughly one third of administrators (31%) chosen buyer expertise (16%) or product/service improvement (15%) as the best alternative for generative AI, indicating boards see worth in constructing top-line progress and buyer loyalty. In the case of threat, boards are extremely involved about improper, inaccurate, or biased use of the info, fashions, and outputs, together with violations of knowledge privateness legal guidelines. Concern of job loss and injury to worker morale and firm loyalty (15%) can be a high cited threat. Boards and administration groups may also help offset threat by establishing sound governance practices whereas allaying fears by speaking methods for upskilling and figuring out the place AI can create alternatives for profession progress.
Working to Solidify a Tradition of Compliance
A difficult financial surroundings heightens the danger of fraud and organizations’ ever-increasing reliance on digital applied sciences can act as an accelerant. Setting a powerful tone on the high for fraud compliance is the accountability of all administrators and administration groups.
When requested to explain all the actions their board engaged in as a part of its oversight of the prevention and detection of fraud, the highest three most cited embrace commonly reviewing and discussing compliance supplies in board conferences (43%), monitoring and investigating whistleblower reporting mechanisms (41%), and discussing company-specific elements which will enhance the chance that fraud could happen (40%).
Obtain the “2024 BDO Board Survey” right here.
The previous press launch was offered by an organization unaffiliated with NonProfit PRO. The views expressed inside don’t instantly mirror the ideas or opinions of the workers of NonProfit PRO.
