January 26, 2024

How Corporate Boards Can Confront Crisis and Embrace Opportunity

As we enter into 2024, the world is experiencing conflicts in a multitude of countries and these conflicts are having an adverse effect on global trade, which in turn, impacts global financial markets. As EY, a consultancy, says in its report on how boards of American companies can confront crisis and embrace opportunity, "Dynamic global crises continue to challenge companies, with the escalation of conflict in the Middle East, the war in Ukraine, geopolitical complexities related to China, and an uneven global economy creating a sense of permanent crisis on a multitude of fronts." 

The multinational consultancy adds: "At the same time, exceptional growth opportunities seem at hand. Generative AI (GenAI) represents a groundbreaking leap in technology with the potential to increase productivity and transform work, business models and society. Further, the continuing energy transition demands a reframing of business strategy to mitigate risks and thrive in a low-carbon economic future."

Moreover, "In this context of crisis and opportunity, directors are deepening their engagement. They are guiding companies to build resilience by considering multiple alternative scenarios and carefully balancing discipline and transformation."

Below are the key findings of each chapter of the report with recommended actions for boards and questions a board should be asking (the recommended board actions and questions are copied verbatim):


The report's first chapter focuses on how to stay agile amid continued economic uncertainty. The chapter's key point is boards should enhance oversight and flexibility as uncertain economic conditions persist. "Global economic activity remains subdued heading into 2024, with rising geopolitical tensions and tightening financial conditions as key risks. As the year begins, companies can expect slower business and consumer spending, along with softer labor market conditions and still-elevated costs." Furthermore, "Companies must navigate an ever‑shifting landscape of geopolitical and economic uncertainty. To do so, they will need to build resilience and agility in their operations."

What boards should do in 2024:
  • Embrace agility and oversee flexible strategic planning that incorporates dynamic multi-scenario planning. Boards have an opportunity to guide management, pressure-test plans, and assess multiple options for achieving strategic goals in the current operating environment. Directors should ask what economic, financial and customer demand scenarios have been considered and what the potential impacts are on financial performance, growth and strategy.
  • Confirm how the board will receive timely updates about macroeconomic developments that could impact the company. The board is a strategic resource to the management team in preparing for different economic scenarios and thus needs timely and relevant information from experts beyond the management team to do this effectively. This information should directly inform scenario planning.
  • Help management focus on the long term. This will be important as the company considers how to adapt to potential economic deceleration and various challenging geopolitical developments. For example, the board can oversee how productivity, training and efficiency gains can offset higher labor costs. The board can also encourage capital strategies that position the company to thrive as broader technology and sustainability trends continue to reshape the business environment.
Questions for the board to consider in order to enhance oversight and flexibility as uncertain economic conditions persist:
  • How is the company planning for a range of economic scenarios, including those in which geopolitical developments keep inflation elevated, and potentially rising, for longer?
  • How often does the board ask leadership: "What if we’re wrong?" How is the company considering what it would do differently if a low-probability, high-impact scenario was to emerge?
  • What is the company doing to stress-test its balance sheet and develop and test a crisis playbook that gives company leaders comfort in their ability to manage through even the worst‑case scenario?
  • How is the company developing a resilient strategy around pricing, capacity management and location, and distribution that is nimble enough to navigate a world where demand will ebb and flow more significantly than in the past few decades? How is scenario planning supporting that strategy?
  • How is the company evaluating costs, investments and decisions in the context of its long-term strategy, especially regarding technology, talent and the energy transition?


Focusing on how to balance discipline and transformation in capital strategy, chapter two of the report discusses how to adapt strategic priorities to a slower-growth environment. According to EY, "A mantra for many leadership teams this year will be financial discipline. Growth at any cost has given way to investments that must show a clear path to profitability or value creation. Still, companies cannot afford to retrench." In addition, "Companies cannot afford to let financial caution prohibit necessary investments for long-term growth, such as those related to technology and sustainability."

What boards should do in 2024:
  • Encourage accelerated investment for long-term growth and competitiveness. Boards must keep the long term in view for management so that companies do not miss out on innovations or avoid tough decisions that will be necessary to stay competitive in a future that will look very different from the past.
  • Enable management to maximize profitability and position for business model transformation. Challenge how management is identifying opportunities for cost management, tracking the progress on investment decisions and considering how markets could evolve and impact the use of capital in existing and potential businesses. Probe how internal rationalization, cost cutting and divestitures can fund future transformation.
  • Promote enhanced communication with investors about the company's capital strategy. Capital allocation can be a key area of focus for activist investors, and a bear market leaves companies more exposed at a time when investors are less forgiving. In an environment of heightened shareholder activism, boards can help challenge whether companies are doing enough to communicate the company's strategy narrative proactively with shareholders.
Questions for the board to consider to facilitate the balancing of discipline and transformation in capital strategy:
  • How is the company optimizing its capital management and reducing direct and indirect costs through an era of continual change? How is it considering internal cost cutting as potential funding for ambitious transformation?
  • How is the company investing to mitigate risk and create long‑term growth opportunity despite multiple headwinds? Is it maintaining the right balance of innovation and capital strength?
  • How is the board defining its role as stewards of investor capital? Does that role include positioning the business to thrive as the world evolves?
  • How is the company's capital investment strategy changing in areas such as digital and technology, people and skills, innovation and research and development (R&D), and sustainability? How are board committees coordinating their oversight of these matters?
  • What types of transactions (e.g., M&A, divestment, new joint ventures or strategic alliances) is the company considering to achieve its strategic goals? Are those options explored at the board level or is the board presented only with management's decision?
  • How is the company's investor engagement program keeping key shareholders informed of the company’s long-term value creation strategies and the board’s related expertise? Do disclosures describing the board’s composition demonstrate that, individually and collectively, the board is fit for purpose?


The next chapter of the report addresses the importance of embracing cybersecurity and data privacy as strategic advantages. Emphasizing how companies should broaden cybersecurity and data privacy beyond compliance, the report points out that "While cybersecurity and data privacy are perennial concerns for boards, they include a complex set of always-evolving drivers, and background knowledge that can quickly stale. 2023 saw a variety of different changes in the cybersecurity landscape, such as the quick adoption of new technologies, new geopolitical influences, new regulatory requirements and increasing nation‑state bad actors." What is more, "A more complicated environment will likely cause many organizations to mature their cybersecurity oversight through 2024."

What boards should do in 2024:
  • Reconsider whether cybersecurity oversight is structured the right way. The new SEC disclosure rules may be a good opportunity for the board to reconsider whether it is structured appropriately to oversee cybersecurity in the years ahead. To do so, it may consider adding (or removing) a focused committee, concentrating or distributing cyber expertise throughout the board, changing the cadence of cyber discussions, or otherwise altering the board agenda.
  • Participate in complex cyber threat tabletop exercises. These can be done either separately or with management, and complex cyber exercises can be incorporated into the board calendar. These scenarios should be varied and dynamic. Although it may be unlikely that a specific scenario will be replayed in real life, the simulation can develop the board’s muscles for dealing with a challenging crisis; pressure-test existing playbooks, discussing policy such as whether the company will pay ransoms; and uncover opportunities to improve processes and procedures.
  • Maintain a wide variety of voices in the boardroom. In addition to members of the cybersecurity team, directors may seek a variety of voices, ranging from operators and internal audit to HR and strategy, to understand the company's preparation that extends beyond threat and response to data privacy and ethical data usage. This can give insight into how the company’s cyber risk appetite is being applied and whether the cyber risk culture meets expectations. Further, complexity can be a barrier to effectively combating cyber threats. The board may ask management teams to consider how IT security systems can be simplified.
Questions for the board to consider to embrace cybersecurity and data privacy as strategic advantages:
  • How has management adapted the cyber response playbook to the threat environment that continues to evolve?
  • Have appropriate and meaningful cybersecurity and data privacy metrics been identified and provided to the board on a regular basis, and have dollar amounts been assigned to these risks?
  • What is the state of the organization's cyber risk culture? How can the organization minimize employees' susceptibility to online manipulation and deceit?
  • What information has management provided to help the board assess which critical business assets and partners, including third parties and suppliers, are most vulnerable to cyber attacks?
  • How does management evaluate and categorize identified cyber and data privacy incidents and determine which ones to escalate to the board?
  • How does the organization use data to build and maintain trust with stakeholders, such as employees, customers, suppliers and investors?
  • What controls are in place for ethical usage of technology to promote stakeholder trust and data privacy?
  • Has the board participated with management in one of its cyber breach simulations in the last year? How rigorous was the testing?
  • Has the company leveraged a third-party assessment to validate that the company's cyber risk management program is meeting its objectives? If so, is the board having direct dialogue with the third-party related to the scope of work and findings?


The fourth chapter of EY's report addresses the importance of guiding responsible and transformative innovation and technology by enabling the company to innovate in a way that is both revolutionary and ethical. "GenAI is only one of many emerging technologies that is already impacting business in expected and unexpected ways. Other technologies and innovations include the metaverse, Internet of Things, Web3, and quantum computing. These advancements will transform the work organizations do and the environment in which they operate." The report further asserts that "GenAI's appeal puts pressure on management to take advantage of its potential for strategic advantage before their competitors do, or risk falling behind."

What boards should do in 2024:
  • Strengthen management accountability for responsible AI. Boards are in a strong position to make sure that management teams are creating responsible AI policies that effectively manage the risks and capitalize on the opportunities available for the enterprise while keeping the company's values and purpose as a north star. It is not enough to require that policies are in place. Boards should go further to push management to ensure that employees adhere to such policies, that there is a mechanism to determine if they are not and that managers are quickly fixing problems.
  • Embrace a range of perspectives and experiences in the boardroom. Directors with a wide variety of professional and lived experience are increasingly important to help drive innovation and govern emerging technology. This diversity enables the board to better identify nontraditional threats and encourage management teams to responsibly leverage new technologies and innovations. Further, a variety of perspectives from within the boardroom fosters an environment that facilities robust discussion, allowing key assumptions and conclusions in strategy, operations and other areas to undergo thorough pressure testing.
  • Gain visibility into external trends and internal capabilities. An intentional approach to understanding the trends likely to impact the company over the long term is critical for a "future‑back" approach to strategy. This strategy approach envisions possible future scenarios and then works backward to identify the strategic objectives in order to ensure the company is viable in that future. Further, working to understand the company's internal capabilities by going beyond C-suite presentations through hands-on experience and R&D visits can help the board better evaluate how management is placing bets across the enterprise.
  • Build agility into the decision-making process. The pace of innovation is fast and may only get faster. A traditional board meeting cadence — four to six full board and committee meetings a year — may be insufficient to support the needs of the company. Boards should work with their management teams to consider a more flexible trigger-based approach to strategic planning that entails a more consistent evaluation of the future. At the same time, boards may gain value by looking inward to consider the current structure for overseeing innovation and emerging technology. Confirming that the board’s structure remains fit for purpose is critical to making sure the board does its best to support innovation and emerging technology.
  • Investigate innovation in the boardroom. The board may start to consider the ways in which innovations such as GenAI can improve its own work. GenAI may be able to support boards by summarizing large and complex board materials, more efficiently schedule time for board and committee meetings, and provide background and learning curriculum for new and emerging boardroom topics.
Questions for the board to consider to enable the company to innovate in a way that is both revolutionary and ethical:
  • What is the company's path to value with GenAI and other technologies? How are the risks identified and managed?
  • What policies has the company implemented to confirm that GenAI is used responsibly? How does management know they are working?
  • How is the company's innovation budget and program contributing to the creation of an informed strategic plan leveraging emerging technology?
  • How is the board thinking about and redefining competitors or industry boundaries? Who might now be a competitor but wasn't previously?
  • How are responses to changing stakeholder demands, expectations and operational disruptions leading management teams to innovate?
  • How are investments in innovation tracked and reported to the board? Is the board engaged in innovation discussions as part of the strategy-setting process?
  • How is the board building a foundational understanding of evolving technologies, including learning through hand-on demonstration and experience? How will companies create an ecosystem in which AI and data protection coexist and create synergies to generate a better value proposition for users and customers?


Chapter five of centers on enabling a people-centric workforce strategy by guiding talent engagement and cultivation amid a rebalancing of power and a reimagining of work. "The talent landscape is constantly being disrupted by a combination of cyclical and structural forces. This has led to a divergence in perspectives between employers and employees." I agree that "Employers may be underestimating the fluidity of the labor market." As the report explains: "While 57% of employers believe that a more challenging economic climate would reduce employees' likelihood of seeking new jobs, the survey found that a significant 34% of employees expressed their willingness to leave their current jobs within the next 12 months. This highlights the importance of talent availability, acquisition and retention. For directors who view talent as a top priority in 2024, 77% said these topics were most important."

What boards should do in 2024:
  • Seek a deeper view into employee sentiment and perspectives by hearing from employees more directly. Boards should actively engage with the chief human resources officer (CHRO) and seek direct input through tools such as pulse surveys and interactions with front-line employees. This approach enables boards to hear employees' voices directly and fosters a culture of inclusivity and engagement.
  • Guide management to put people first in workforce strategy and cultivate a culture of trust. This involves boards evaluating the leadership team and their incentives to energize and inspire employees, ultimately gaining their trust. Additionally, boards should oversee how management implements workforce re‑skilling and training initiatives to prepare the workforce for future challenges, while actively involving employees as partners in that transformative journey.
  • Enhance stakeholder communications around compensation committees' oversight of human capital matters. With potential new SEC rules and heightened attention on high-profile strikes, stakeholders will scrutinize the board’s role in governing the talent agenda. Investors will seek to understand whether the compensation committee or full board has a meaningful impact on shaping a resilient talent strategy.
Questions for the board to consider to guide talent engagement and cultivation amid a rebalancing of power and a reimagining of work:
  • How does the company's talent strategy advance its overall strategy? What changes have been made to other elements of the business to advance the talent strategy?
  • How is the company identifying and addressing employees' chief areas of concern?
  • How is the company's leadership team earning trust with employees? Do the company's employees feel connected, inspired and well-informed at work? Do they feel that leadership cares about them as people?
  • How often is the board engaging directly with the CHRO or equivalent and what is the substance of those discussions? How is the board getting a direct line of sight into employee perspectives below the executive level?
  • What human capital management metrics are the board or compensation committee reviewing? How do those metrics align with the long-term talent strategy, and what narrative is the company communicating to stakeholders about its talent agenda?
  • How is the company providing support for career path and progression, including mentoring, learning and development programs, and updating organizational design to open opportunities for advancement? Are upskilling and retention central to the company’s talent strategy, including key areas such as technology and sustainability?
  • How is the company making the use of AI compatible with talent development so that the company’s strategy can adapt quickly to the constantly changing business ecosystem?
  • How is the company approaching in-office, fully remote or hybrid working models and maximizing the human experience of work in its talent strategy? How is the board getting insight into employee sentiment related to hybrid and remote working across different job functions, geography, age and gender?


With the thesis of balancing top priorities with additional imperatives, being careful to not overwhelm the board agenda, the report's sixth chapter addresses the importance of keeping other focus areas on the board agenda. "The board's priorities for 2024 are not the only areas of risk and opportunity that boards will need to address this year. There are other business imperatives to consider in the year ahead" such as keeping pace with regulatory developments, guiding political considerations, overseeing supply chains as strategic assets, and addressing climate change and environmental stewardship.

Questions for the board to consider 2024:
  • What systems and processes are in place to monitor international and domestic legislative and regulatory developments and keep the board informed as appropriate? How is management taking prudent action now to prepare for future regulation as appropriate?
  • How is the company ensuring visibility across global supply chains and considering alternative suppliers to improve resilience to shortages or price volatility? Is it evaluating supplier relationships for potential geopolitical complications and exploring alternative networks tuned to the new geostrategic environment?
  • Does the company view climate- and nature-related initiatives as a means of protecting and creating more value for the business?
  • How is it exploring opportunities to transform its business portfolios while reducing emissions?
  • How is the company engaging and supporting suppliers to influence emissions reduction through their supply chains? Has the company considered a strategic partnership or joint venture to help achieve its climate agenda?
  • How well do management and the board understand how geopolitical developments affect current and future strategy? Is scenario planning used to explore multiple plausible futures and their potential business implications systematically?


EY concludes its report noting that "In 2024, boards will need to enhance their strategic value by enabling resilience through discipline and transformation. They must guide management to balance short-term demands and long-term growth and support the organization as it confronts crisis and embraces opportunity."

Moreover, "While cyclical changes such as inflation and consumer spending require attention and may present tactical opportunities, it is structural changes such as the GenAI revolution, geopolitical fragmentation and the energy transition that are significantly impacting strategy and raising the stakes for businesses and society. Effective boards will provide valuable insights, effective challenge and leadership to enable companies to make agile decisions aligned with their values in this turbulent environment."

In the report's introduction, EY notes that its "2024 board priorities relate to near-term issues (e.g., economic uncertainty and the cost of capital) as well as longer-term priorities (e.g., innovation and workforce development)." I agree that "A crucial role of the board this year will be guiding management in balancing what is urgent to address now with what is vital to invest in for the future." How is your business balancing the urgent matters that need address now with investing in vital initiatives for a sustainable future?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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