Boardroom Strategies for an Evolving Risk Landscape

The NACD Directors Summit 2024 kicked off Oct. 6, providing attendees with insights on how boards can navigate and perform effectively in an ever-evolving environment.

As businesses continue to navigate an ever-evolving environment, attendees at the NACD Directors Summit™ 2024, which opened Oct. 6, explored how traditional and contemporary risks, and other disruptive forces are impacting boards. Traditional risks include operational, financial, regulatory, and industry-related challenges, while contemporary risks involve reputational, technological, and geopolitical factors.

The premier annual conference, which brings the governance elite together to shape the future of boardrooms, is being held at the Gaylord National Resort & Convention Center in the Washington, DC, area through Oct. 9, 2024.

Almost 1,500 directors and executives, including Fortune 500 leaders, from thousands of boards are expected to attend. This year’s event features cutting-edge insights from more than 200 visionary speakers, tailored learning tracks on crucial governance topics, and unparalleled networking opportunities. Learn more.

Here are key takeaways from the opening day sessions.

Implement dynamic risk management. In a rapidly evolving business environment, directors must stay agile in their risk oversight. “Active sensing” enables boards to access real-time data on how current events affect risks. The board should encourage management to establish deep expert teams to mitigate new mission-critical risks. This approach helps future-proof the organization by managing risks before they cause harm. 

Be your own activist. Board members need to proactively identify and address vulnerabilities within their companies before activists target those weaknesses. A tactical defense against activism is ensuring the company’s bylaws are well-structured and that internal processes are robust, so when activists do emerge, the company is prepared. Strategically, the best defense against activism is a high-performing company, which starts with having the right CEO in place. Additionally, boards should engage with investors early to build trust, ensuring the board has a strong relationship in place with investors when facing activists.

Fear of artificial intelligence (AI) affects organizations at every level. If leaders hesitate to discuss AI with employees, they’re unlikely to ease employees' concerns. On the other hand, companies must also consider how AI impacts their workforce from the bottom up. If and when AI takes over entry-level tasks, management and the board must rethink their talent pipelines—how will they fill senior roles when junior positions disappear?

Consider CEO candidates with imperfect resumes. In the post-pandemic world, leaders with flawless resumes may lack the resilience needed today. “B” players are often more driven, working harder to overcome past mistakes and apply lessons learned. Boards may also want to evaluate personal challenges that have shaped candidates' ethics, values, and work styles.