Boards are Becoming More Complex in 2024

The world is shifting fast. For those advising the industry’s leadership teams, it marks a major evolution in their responsibilities—and experieces. 

The progression from senior executive to board director is storied. Once a leader has enjoyed multiple C-level positions and group responsibilities, often in a diverse range of sectors or regions, the challenges those pose begin to lose their lustre. Board directors offer their expertise and experience within a more advisory context, with fewer hours, none of the day-to-day responsibilities, with remuneration on top. The organisations are usually closer to these leaders' hearts, too, and can be balanced with a number of Non-Executive Director (NED) roles to keep the weeks fresh. It is easy to see why executive to board member is a favoured transition within and outside of HotTopics’ C-suite communities. 

Yet the rising complexity of board membership threatens to shake up this journey, whilst offering leaders a far richer, potentially more rewarding, experience.

The NED: An overview

• What it means to be an NED today
• Trends impacting the make-up of Boards
• Complex does not mean complicated

What it means to be an NED today

The Board’s agenda is stacking up. 

A mercurial geopolitical environment of late has leadership on edge; fifteen years of digitalisation promising readiness for the future has been, confusingly, both accelerated and undercut by generative AI; and ongoing climate change shines a harsher spotlight on ESG policies with each passing year. What was once a room full of experienced people focused on shareholder value and CEO support now sees a group looking far deeper and further into corporate life than ever before. 

NEDs are reporting that their inboxes are far more diverse than they first envisioned. They see questions around company strategy, investments and M&A, risk, and, perhaps most interestingly, talent. This propels the Board to a position not dissimilar to the executive team, raising questions about the new equilibrium between salaried executives and board members. 

Where is the new line between what is seen as advice and what is seen as artifice?

A higher quantity and quality of board meetings is one answer to that. Ten years ago, four meetings a year were sufficient. Now, meetings happen many times a quarter on top of specific or special committees to make time for themes such as ESG, D&I and AI.

These special committees are now necessary, given the ever-expanding list of priorities facing the C-suite and the lack of time (and talent and resources) they enjoy. The benefits are twofold: one, board members are hired for their expertise and skill set that are a valuable set of insights on which to lean; two, these committees can often discuss pivots being made by the organisation that the executive team may want confidence in accelerating. The Board can offer this long-term rubber stamp, even in the face of shareholder cynicism. It is a remarkable change of style for NEDs.

Trends impacting the make-up of Boards

Board meetings benefit from preparation, from note materials to ensuring the right people are in the room. This not only allows each Board member to crystallise their thoughts ahead of time, but also for the CEO to share their priorities for each discussion. NEDs are also favouring debate over slide presentations, meaning leaders are spending more time outside of meetings reviewing assets such as decks, as they seem to beget better insights.

This isn’t necessarily having an impact on the make-up of Boards today. 

A push for more diverse Boards is still a focus for many in the Fortune 500 and FTSE 100. An increase in former CIOs making NEDs is also adding to the technical literacy rate of Boards. Yet the biggest changes might be in how each individual NED manages their time: ones who would have enjoyed five or more Board seats might now prefer two or three, given the uptick in commitments. 

These commitments now increasingly involve talent development.

As one of the biggest challenges facing the entire industry, talent retention and succession planning is a cornerstone in the long term viability of an organisation. CEOs and senior executives sometimes do not have the luxury of choice so the Board is being increasingly relied upon for support and mentoring, even one or two steps beyond the typical C-suite position. It means more visibility for NEDs within the business; it is just another way businesses are extracting more value from their Boards.

This is the crux of the complexity. 

It isn’t just that the world is becoming more complex, it is that a complex world demands of its organisations a stronger collaborative force at the top of each company, between its executives and its board of directors. Talent mentoring is one such area; strategic projects are another. Individual NEDs assisting individual executives on a project is not an uncommon practice today. It both allows NEDs better access to the wider leadership team, which provides invaluable insight, and better management of risk. 

Complex does not mean complicated

Becoming an NED comes with responsibilities and rewards. A more complex working environment evolves those in significant ways, often positively, making the role more invaluable than ever. It is still true to advise caution, however, when navigating the executive to board member journey. Even though the skills required for one aids in the success of the other, they are different roles, with different expectations—and different pay packages. Walking into these roles is not easy, but must be done with eyes open—and able to see past corners.