Corporate boards are pivoting toward growth strategies and away from cost-cutting measures as they navigate 2025’s risk landscape, according to a new survey of more than 200 public company directors.
For the first time in years, strategy has replaced cybersecurity as directors’ most challenging oversight issue, with 41% of respondents citing it as their top concern, according to the 22nd annual “What Directors Think” report published by Corporate Board Member in partnership with Diligent Institute and FTI Consulting.
“After years of putting out fires, the great majority of U.S. public company board members surveyed are starting 2025 feeling more in control and optimistic, with 76 percent choosing ‘pursuing growth’ as their top priority this year,” the report states.
Shifting priorities
The survey reveals that 76% of directors are prioritizing growth opportunities in 2025, marking a sharp turnaround from recent years’ emphasis on cost-cutting. Many plan to capitalize on an improving M&A landscape, with mergers and acquisitions rising to the third most cited priority, up 30% from last year.
Other key findings include:
- Only 30% of directors rate their board’s understanding of company long-term strategy as “excellent,” highlighting why strategy oversight has become so challenging
- CEO succession planning ranks as the second most challenging oversight issue (30%), up from fourth place last year
- Despite remaining a significant concern, cybersecurity dropped to third place (27%) among oversight challenges
Technology and AI adoption
While cybersecurity may have dropped in the ranking of challenges, it remains a critical area of focus. The survey found 61% of directors believe a major cybersecurity incident would significantly impact their strategy, yet only 51% say their board has reviewed its process for identifying and disclosing such incidents.
AI adoption continues to accelerate, with 80% of boards taking action on artificial intelligence — a notable increase from two-thirds in May 2023. The most common AI implementation is incorporating the technology into business operations (44%), with directors primarily seeing its potential to optimize operations (42%) and enhance workforce productivity (42%).
However, directors identified significant AI implementation barriers, with one-third citing lack of knowledge and capabilities among their leadership teams as the biggest risk.
Executive communications and shareholder engagement
In today’s polarized environment, boards are increasingly cautious about executives speaking publicly on controversial issues. An overwhelming 82% of directors believe a board should not encourage C-Suite leaders to speak publicly on controversial topics.
The survey also found a significant downshift in directors’ focus on shareholder engagement, with only 11% considering it a top priority, down from previous years. This may reflect confidence in improving market conditions reducing the likelihood of activist pressure.
Board effectiveness concerns
Directors identified several opportunities to improve board effectiveness, with 39% recommending specialized training for certain members, 38% supporting increased education for all board members, and 37% suggesting implementation of new tools and technology for oversight.
When seeking new board members, directors are prioritizing industry expertise (53%), C-Suite experience (41%), and digital/technology expertise including AI (33%).
“The data suggests that boards are placing an increased emphasis on adapting to changing market conditions and preparing for strategic growth opportunities in 2025,” the report concludes, while noting that many boards still struggle with key oversight areas like succession planning and technology implementation.
