In the wake of increasing complexities anticipated for the business landscape in 2025, boards and audit committees are being urged to proactively steer their organisations through a myriad of challenges. These include geopolitical tensions, economic uncertainties, and rapid advancements in technology, as well as the evolving policies of the new administration. Amidst these developments, the KPMG Board Leadership Center has launched its “On the 2025 Agenda” series of reports, aimed at helping boards shape their agendas for the upcoming year and beyond.
John Rodi, Co-leader of the KPMG Board Leadership Center, emphasised the demanding environment that boards will face in 2025: “Boards will have their oversight and corporate governance processes put to the test in 2025, as companies confront unprecedented disruption and uncertainty.” According to Rodi, the intersection of global conflicts and economic pressures will significantly influence the business and risk landscape that organisations must navigate.
A critical area of focus remains financial reporting and internal controls, which Rodi described as “job number one for audit committees.” Anne Zavarella, Co-Leader of the Board Leadership Center, reiterated the importance of audit quality: “Audit quality remains a cornerstone. Audit committees should assess whether they possess the necessary leadership, composition, and time allocation to effectively fulfil their core oversight responsibilities, while also addressing the expanding range and intricacy of other risks.”
Looking ahead, the likelihood of significant tax legislation emerging in 2025 has been highlighted, making tax policy discussions essential for all boards. The potential implications for cash flow, investment, and the overall business environment are prompting calls for proactive measures in response to these changes.
As the demand for transparency increases, particularly in relation to climate change, AI integration, and cybersecurity, boards and audit committees are expected to deepen their understanding of management’s risk assessment and strategic planning processes. This knowledge will be vital for ensuring business resilience and continuity.
Emerging technologies, notably in the realm of artificial intelligence, will bring both opportunities and challenges that require careful consideration. Boards are advised to gain a comprehensive understanding of their company’s AI strategy, ensuring it aligns with broader business goals while remaining vigilant to risks associated with data quality, cybersecurity, and compliance with evolving regulations.
In addition to these technological advancements, CEO succession planning, talent development, and fostering a positive corporate culture have been identified as pressing topics. Effective communication with stakeholders, greater transparency, and improved disclosure practices will also be pivotal in helping boards navigate the complexities expected in 2025, thereby enabling them to uphold robust oversight of their organisations.
Source: Noah Wire Services