Preparing for a Changing Landscape

Directors and their boards are determining how to best position their companies to navigate a shifting regulatory and economic environment, according to the NACD Quarterly Survey findings. Meanwhile, the confluence of artificial intelligence and cybersecurity threats continue to keep directors up at night. The “Q4 2024” survey was in the field from December 4th to December 23rd, and asked directors to identify the top business issues on their board’s agenda for the upcoming quarter. (Quotes from survey respondents have been anonymized and appear in italics throughout.) We briefly review some of the key themes below.

What are the top business issues on your board's agenda in the upcoming quarter?

(Respondents could select up to five issues.)

NACD Quarterly Survey - Q4 2024, n=159

Leading up to President Donald Trump’s inauguration on January 20th, many companies and their boards were in “wait-and-see” mode. It does appear that Trump plans to be an active executive from day one, signing multiple executive orders within hours of being inaugurated that are aimed at implementing new policies or unwinding those of his predecessor. While some of these will have more immediate effects, others may face legal challenges and will take time to be implemented. That said, risk management will be key, and directors may find that they need to review the validity of key assumptions underlying their strategies and correct their course after Trump’s first 100 days in office.

Shifting economic conditions

“Shifting economic conditions” was the second most widely selected trend. A key theme among several respondents was an anticipated protectionist economic policy, or, more concretely, “the threat of tariffs.” One respondent noted, “Repercussions will negatively affect economies and potentially curb economic growth.” Another anticipated that “new tariffs could create disruption in trade without an ability to create products in the US.” In addition to these broader concerns, others questioned the effect such policies might have on their companies, such as the respondent who questioned the “potential impact on our consumer base,” or another who wondered, “How will tariffs impact consumer spending and the supply chain?”

Regulatory Requirements

The third most selected trend was “regulatory requirements,” selected by 43 percent of respondents. Multiple respondents indicated that they were watching for “potential changes arising from change in administration.” On respondent highlighted that “changes in leadership of regulatory agencies” may have an effect. To take one example, Trump’s pick for chair of the SEC, Paul Atkins (following SEC Commissioner Mark Uyeda, who will serve as chair on an interim basis), is anticipated to have a very different approach to enforcement of SEC regulations than the outgoing chair, Gary Gensler. Other respondents are more skeptical of the significance of the change in administration:

“In spite of the changes that will be related to the new administration, historically, the rules and regulations put in place by the previous administration normally stay in place.”

Cybersecurity and Artificial Intelligence

As significant as the change in administration may prove to be, cybersecurity was the most selected issue in this quarter’s poll, selected by 46 percent of respondents. This is not necessarily surprising, as the threat is real and ongoing. “We’ve been forced to respond to an incident in [the] past month,” one respondent noted. While some respondents say that they are prioritizing cyber resilience, another laments that “evolving attack vectors, including ransomware and supply chain breaches, challenge existing defenses and resilience planning.” Among these new attack vectors are those leveraging advances in AI technologies:

“Cybersecurity threats keep expanding and overwhelming companies, as AI has brought new tools to cyber criminals.”