Boards in Survival Mode

This is one of Korn Ferry's Under the Radar trends for 2025. You can read about all these trends here. 

Boards are under more pressure than ever to change the way they govern and, if they don’t, it could cost directors their seats.

With directors being held more accountable for their company’s successes—and more liable for its failures—the changing relationship between boards and management is one of the biggest under-the-radar trends to watch out for in 2025, say experts. In an effort to keep activist investors at bay, boards are demanding more visibility into companies and deeper insight into management’s thinking, says Claudia Pici Morris, co-lead of the Board Succession practice at Korn Ferry. “How boards go about oversight is shifting,” she says. “Directors are asking how they can engage management in different ways and get different perspectives to do their jobs more effectively.” That could involve measures such as changing the way board meeting materials are prepared and delivered, creating special committees, bringing in outside experts and advisors, and more.

Critics say that directors who want more transparency from management are necessarily going to get it, of course. Part of the reason is that they don’t have the right people or culture to challenge management. “Many boards aren’t able to go toe-to-toe with management on strategy,” says Anthony Goodman, head of the North American Board Effectiveness practice at Korn Ferry. “It’s hard to push for more involvement without that.”

The difference this time around, however, is that if the relationship between boards and management doesn’t change, activist investors are likely to come in and change it for them. After another year of record-breaking activist-investor activity, CEO turnover has never been higher, with more than 1,800 leaders departing through October, up 19% from last year and the highest total on record. Many CEOs ended up leaving unexpectedly, forcing boards into emergency succession measures. According to investment bank Barclays Capital, for instance, approximately 20% of CEOs targeted by activists have been replaced in the last two years. “Boards still don’t realize that the leash on CEOs is getting much shorter before activists get involved,” says Stu Crandell, a senior client partner in the Board and CEO Services practice at Korn Ferry.

Succession is, of course, the chief responsibility of the board, but once an activist gets involved, Crandell says, even the best-laid succession plans can blow up. Internal successors, he adds, often get dismissed as part of the problem. “All that work boards spent grooming candidates often gets thrown out the window,” he says.

To be sure, changing market trends, emerging technologies, geopolitical developments, and other factors will make it even more important that boards address succession planning proactively and often, says Joe Griesedieck, a vice chairman and managing director of board and CEO services at Korn Ferry—not just for the CEO, but for themselves as well. Though the number of board seats won by activists so far this year is down from 2023, directors are being targeted more than ever for such reasons as overlong tenures and outdated skills. Data shows that activists won 64 board seats out of the 157 they sought at US companies during the first half of the year.

Not unlike the companies they oversee, Crandell says, boards this year will be defined by how successfully they can shift from the stabilization mode of the last few years to disrupting themselves. “Boards always have to fight against the trend of becoming too insular and complacent,” he says. 

Learn more about Korn Ferry’s Board and CEO services capabilities.