Global Corporate Governance Trends for 2024

Corporate governance is dynamic.  Boards and the businesses they oversee face new challenges and opportunities—and new demands from their stakeholders—each year.  To help you and your companies stay ahead of the curve in 2024 and beyond, RRA annually brings together the best thinking from our leadership advisors and a diverse array of influential governance thought leaders.  With thanks to those experts, we are pleased to share our ninth annual report on what to watch in 2024.

Corporate governance and demands on corporate leaders vary significantly from country to country, but four topics stand out as most important to businesses and their boards across the globe in 2024:

1. Disruptive innovations: AI & other technologies rise to the forefront

Advancements in AI, quantum computing, and other technologies—coupled with growing information security and privacy threats—are front of mind for business leaders and stakeholders.  While many of these issues have been on board agendas for years, discussions around these topics skyrocketed in 2023, partially due to the proliferation of generative AI tools like ChatGPT.  For example, more than 30% of the S&P 500 and roughly 17% of Russell 3000 companies addressed AI in their proxy statements last year.  Shareholder proposals on this subject will likely grow in 2024, emphasizing AI governance, its effects on the workforce, and the ethical use of AI. In the EU, digital regulation and acts like The Digital Services Act (DSA) will affect how companies can conduct their business with data captured through smart devices and what kind of services companies can offer in the future. Regulatory rollouts are expected to set new rules and limitations for business practices. In Brazil, companies are finding themselves tasked with establishing robust cybersecurity procedures and defenses to thwart potential digital attacks and safeguard against data leaks.

2. Path to parity: Sustained global focus on diversity

Boards around the world are spending more time on their own composition, seeking to build and support boards with important subject-matter expertise, international perspectives, cultural and social diversity, and generational balancing.  Many markets have seen a dramatic growth in gender diversity on their boards in recent years.  As of 2023, major indices in France, Italy, and the UK saw more than 40% of their seats held by women; indices in nine other countries had boards comprised of at least 30% women.  Boards and stakeholders are looking for other diversity dimensions in several markets above this threshold, including Australia, Germany, and the United States.  Even in countries that are farther from gender parity, we are seeing progress.  In Singapore and Malaysia, women directors now hold almost 25% of the independent board seats that have become available since 2022’s mandated diversity disclosures.  While Brazil still lags on gender diversity – women held roughly 18% of board seats at the end of Q1 2023 – boards there are also more aggressively seeking diversity on ethnic, age, and other dimensions.  Expect continued attention to gender diversity, and renewed focus on other forms of diversity where boards are closer to gender parity.

3. More action – and less talk – on ESG initiatives

It’s tempting to see ESG as a tale of two worlds.  In some markets – most notably the United States – terms like sustainability and ESG have become politicized and weaponized.  That is affecting both US companies and many international enterprises with operations in the states.  We have heard a reluctance from business leaders, investors, and others to trumpet environmental commitments. This politicization, coupled with the Supreme Court’s recent Fair Admissions decision, also puts a strain on diversity, equity, and inclusion programs.   While many business leaders and investors expected less publicity for some of these efforts – particularly those using the term “ESG” – they are not pulling back on their work.  The goal of the ESG movement was to ensure that organizations consider material, non-financial environmental, social, and governance factors that affect financial performance alongside more traditional financial metrics when making business decisions.  Programs that adhere to this, supporting the bottom-line over the short and longer term, will continue with less fanfare.

Companies operating in other markets are facing pressure to increase and accelerate outputs.  In Australia, investors have a heightened interest in organizations’ carbon transition plans, seeing this as the first step in ensuring that businesses are managing risk appropriately. But it is not just Australian shareholders requiring action from businesses. All four major banks are now expecting major emitters to present “credible energy transition” plans by late 2025 if they want to remain serviced by the industry. In the Nordics, new regulations from the EU in sustainability reporting, nature restoration regulation, digital acts, and geopolitical instability are in focus for boardrooms. The Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and DSA will have a direct impact in corporate governance within a volatile business environment that faces geopolitical issues, fast rapid development of information technology, and climate pressure. In France, ESG and its cousin corporate social responsibility (CSR), continue to be major topics, with dedicated CSR committees in 90% of CAC 40 and 70% of SBF 120 companies.

4. Governance standards migrate: Private looks to public

There are benefits—and many obligations—of being a publicly traded company.  Many non-public companies, such as private capital portfolio companies and family businesses, avoid some of the significant corporate governance and reporting requirements by staying private.  That is changing, albeit slowly and unevenly across the globe.  In India, a new notification by The Securities and Exchange Board of India (SEBI) mandates that promoters of listed companies disclose to stock exchanges all active family settlement agreements or arrangements that have a bearing or influence on management and control of the company.  Additionally, many global VC and PE funds investing in the Indian start-up ecosystem have faced significant governance challenges with founder teams; therefore, we expect significantly greater focus on governance by institutional investors with an increased demand for seasoned CEO experience and skills within the boardroom for start-ups.  In Mexico, private company board members are seeing boards professionalize their activities, with more explicit focus on improving meeting agendas, refining board processes, and enhancing the quality and rigor of strategic dialogue.  We are seeing increased demand for forward-looking board effectiveness projects for non-public enterprises in many other markets, including Brazil, Singapore, and United States.

This paper further delves into these and other corporate governance stories likely populating board agendas in 2024, organized by market. For more context and advice, please get in touch with the authors or your contact at Russell Reynolds Associates.

Lead Authors

Rich Fields leads Russell Reynolds Associates’ Board Effectiveness practice. He is based in Boston.
Rusty O’Kelley III co-leads Russell Reynolds Associates’ Board and CEO Advisory practice in the Americas. He is based in Miami.
Melissa Martin is a member of Russell Reynolds Associates’ Board Effectiveness practice. She is based in Washington, D.C.

Regional Authors

United States
Rich Fields leads Russell Reynolds Associates’ Board Effectiveness practice. He is based in Boston.
Andrew Miao is a member of Russell Reynolds Associates’ Board Effectiveness practice. He is based in New York.
Amy Sampson is a member of Russell Reynolds Associates’ Board Effectiveness practice. She is based in Boston.

Canada
Shawn Cooper is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Toronto.
Bridget McKellar is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. She is based in Toronto.

Mexico
Francisco Ruiz-Maza is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Mexico.

Brazil
Jacques Sarfatti is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Sao Paulo.
Adriel Soares is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Sao Paulo.

United Kingdom
Helen Metcalfe is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. She is based in London.
Susanne Suhonen is a member of Russell Reynolds Associates’ Board Effectiveness practice. She is based in London.

Spain
Ramon Gomez de Olea is a member of Russell Reynolds Associates’ Board Effectiveness practice. He is based in Madrid.

The Nordics
Juha-Pekka Ahtikari is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Helsinki.
Tommi Lankila is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Helsinki.
Micha Rosenthal is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Stockholm.

Germany
Dr. Philip Bacher is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Munich.
Tobias Blickle is a member of Russell Reynolds Associates’ Board Effectiveness practice. He is based in Munich.
Jens-Thomas Pietralla leads Russell Reynolds Associates’ Board and CEO Advisory practice in Europe. He is based in Munich.
Dr. Thomas Tomkos leads Russell Reynolds Associates’ Board and CEO practice in Germany. He is based in Hamburg.

France
Marc Sangle-Ferriere is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Paris.
Soumya Sankar is a member of Russell Reynolds Associates’ Board and CEO Advisory knowledge team. She is based in Munich.

The UAE
Mathew Lewis is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Dubai.

India
Pankaj Arora is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Gurgaon.
Sanjay Kapoor is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Gurgaon.

Australia
Nick Fletcher is a member of Russell Reynolds Associates’ Board and CEO Advisory practice. He is based in Sydney.

Singapore & Malaysia
Alvin Chiang is a member of Russell Reynolds Associates’ Board Effectiveness practice. He is based in Singapore.