In an increasingly interconnected and complex world, corporate boards face significant challenges as they seek to balance financial results, stakeholder expectations, and social responsibility. Historically focused on performance and competitiveness, corporate boards are now under pressure to address a wide range of critical topics, from climate change and sustainability to disruptive technological advances and geopolitical tensions.

The third edition of the report “How Boards Are Evolving to Address Challenges Ranging from Sustainability to Geopolitical Volatility”, produced by three major organizations—Boston Consulting Group (BCG), Heidrick & Struggles, and the INSEAD Corporate Governance Center—provides a comprehensive overview of these issues and how they are transforming corporate practices globally. Based on interviews with 444 directors and executives, as well as 12 roundtables involving more than 130 business leaders from regions such as North America, Europe, Southeast Asia, Africa, and South America, the study highlights that 77% of respondents believe corporate boards should take responsibility for issues that concern society as a whole.

This perception marks a significant shift in the role of boards, which are moving beyond their traditional functions to engage with ethical, social, and environmental issues shaping the future of businesses and society.

In recent years, sustainability has emerged as a top priority for companies across various sectors. According to the report, 82% of executives stated that their organizations have clear knowledge and defined strategies for addressing environmental and climate issues, a development that demonstrates ongoing progress in meeting global demands.

Sectors such as energy and utilities, which are directly impacted by the energy transition, are at the forefront of this movement: 90% of executives in these areas reported confidence in their companies’ ability to handle climate and environmental challenges. This reflects robust efforts to align operations with more sustainable practices, from adopting clean technologies to transitioning to renewable energy sources.

Advances in sustainability are not just a response to social pressures but also a strategy to strengthen competitiveness and ensure long-term survival. The report notes that many companies have adopted preventive practices to better prepare for an increasingly uncertain global environment. “The ability to embrace uncertainties and operate with resilience is far more essential than any specific actions,” commented one of the executives interviewed.

To achieve this resilience, 69% of companies are prioritizing long-term investments in technologies and flexible resource allocation, enabling greater adaptability in the face of crises and rapid market changes.

While notable progress has been made in sustainability, the adoption and understanding of generative artificial intelligence (AI) present one of the biggest challenges for corporate boards. The report reveals that only 37% of executives believe their companies are prepared to integrate generative AI effectively to drive competitiveness and innovation.

More concerningly, 18% of respondents admitted to being completely unaware of their companies’ plans to explore this technology, exposing a significant gap in planning and strategy. This lack of understanding limits companies’ ability to capitalize on AI’s opportunities, which range from process automation to mass personalization of products and services.

“While boards have made significant strides in sustainability literacy, they still struggle to stay up-to-date with generative AI,” the report noted. The research suggests that boards expand their sources of information by combining internal insights with contributions from external experts—a practice that has already proven successful in building strategies related to the environment.

In addition to technological challenges, companies face an increasingly polarized social and political environment, placing boards in delicate decision-making positions. Balancing conflicting demands from diverse stakeholders—shareholders, consumers, activists, and governments—has become a complex task, requiring leaders to possess not only deep technical knowledge but also business acumen, empathy, and personal integrity.

“As issues become more complex, boards need to demonstrate greater ability to navigate uncertain and polarized environments,” the report highlights. This includes the ability to incorporate diverse perspectives into their decisions and the willingness to adopt collaborative approaches to address multifaceted problems.

The report emphasizes that successful corporate boards are evolving into more dynamic governance models capable of responding quickly to market changes and social expectations. These companies not only mitigate risks but also enhance their long-term reputation and value.

The future of corporate governance demands a delicate balance between sustainability and technological innovation. While significant progress has been made in environmental issues, the challenge now is to replicate this success in technological areas, especially in integrating generative AI.

To achieve this, boards must take a proactive approach, investing in continuous training, expanding their knowledge networks, and fostering collaboration across different sectors and disciplines. Additionally, organizational resilience—a recurring theme in the report—will remain a critical differentiator in an increasingly dynamic and interconnected world.

By aligning sustainable practices with innovative technological solutions, companies can not only overcome current challenges but also lead transformations that will shape the future of business and society. As the report concludes: “Adaptability and continuous learning are the keys to thriving in an environment marked by constant change and uncertainty.”

The report underscores that companies have made significant progress in critical areas such as sustainability, demonstrating greater awareness and adaptability to global demands. However, the current landscape requires boards to broaden their scope to tackle emerging challenges, such as the strategic use of generative AI and managing tensions in a polarized environment.

The ability to balance social, environmental, and technological demands will be decisive for organizational success. More than ever, companies need to adopt integrated and dynamic approaches, investing in resilient governance and continuous knowledge. This effort will not only help them navigate present uncertainties but also position them to lead the necessary transformation toward a sustainable, innovative, and balanced future.