Corporate Governance Trends in Mexico

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Increased scrutiny on board composition

As businesses navigate a rapidly changing environment and increased volatility in Mexico due to political, international, and economic shifts, there is a growing emphasis on re-evaluating board composition. Many boards are realizing the importance of aligning their composition with strategic needs, and expanding their searches beyond just acquaintances of the current board and leadership team. More attention is being paid toward identifying gaps in skills and expertise as an essential component of effective governance. The trend towards greater diversity (including independent perspectives) is gaining traction, with a 12.6% change in gender diversity since 2020, as boards seek to enhance their strategic oversight and decision-making capabilities. Driven by a convergence of external pressures, market scrutiny, investor concerns, and company performance, this trend is expected to accelerate in the coming year.

Louder call for structured CEO succession process

CEO succession planning is also under intense examination as boards recognize the strategic implications of leadership transitions. The separation of the CEO and board chair roles is becoming more common, particularly in family-owned businesses, to ensure accountability and strategic alignment. Further, as boards spend more time on CEO succession planning, there is a growing trend towards structured and forward-thinking succession processes supported by independent board members who provide critical oversight. That said, succession planning is a complex process—per RRA’s Global Leadership Monitor, only 52% of board directors are confident in their ability to design a successful strategy for leadership succession at the C-level. Still, this evolution reflects a broader cultural shift towards modern governance practices, emphasizing the importance of independent opinions and the potential challenges of familial influence in leadership roles. In the coming year, boards can expect richer discussions about the importance of structured and transparent CEO succession processes.

Less ESG but more governance evolution

ESG considerations are continuing to reshape governance practices in Mexico. While open support of “ESG” has faded, in line with global trends, the G (governance) aspect continues to gain in relevance and understanding. Companies are increasingly aware that effective governance is foundational to achieving business objectives. This awareness is further fueled by investor expectations and the push for transparent reporting and accountability. As such, Mexican boards continue to refine their governance frameworks, further emphasizing the role of independent directors and the strategic integration of improved governance standards. Geopolitical unrest, the fragile relationship with the US that is likely to be impacted by the incoming Trump administration, and domestic demand volatility are underscoring the support for heightened governance norms, especially in family-controlled companies.

Cybersecurity soars to the top of board agendas

In 2025, cybersecurity will become a top concern for boards across industries in Mexico. The increased frequency and sophistication of cyberattacks have necessitated substantial investments in technology and specific cybersecurity, requiring board-level decisions due to their impact on profit and loss statements. Despite this urgency, there is still confusion regarding the accountability of cybersecurity issues, with debates on whether they fall under corporate security, IT, or a combination of both. This ambiguity highlights the need for boards to enhance their understanding of cybersecurity, especially as it becomes a more recurrent topic in the boardroom. Experts are encouraging boards to be proactive and differentiate themselves by adopting advanced cybersecurity strategies to safeguard their organizations or, at a minimum, begin to provoke this conversation.