Ensuring your board is fit for purpose in 2025
Boards everywhere are facing a more challenging environment. Cyber threats, artificial intelligence, and the rise of digital business models are changing how organisations operate. A board that was fit for purpose a few years ago might not be today.
Through more than 600 board reviews, we have seen what works and what doesn’t. We’ve worked with boards that lead with purpose and prioritisation and with those that need a course correction. We know that real improvement starts with honest reflection and practical steps.
In this article, we draw on insights from a recent Governance Institute Webinar, during which Audette Exel AO (Founder and Chair of Adara Group), Cheryl Hayman (Non-Executive Director, Silk Logistics and AI Media Technologies), and I discussed this topic. We shared the landscape that boards will navigate in 2025 and how to ensure your board is fit for purpose.
Why boards must evolve fast
Boards that don’t adapt are putting their organisations at risk. The world is changing quickly. Global politics, the economy, and the environment all affect how organisations operate. Too many boards still think it’s business as usual. But that gap between what the board focuses on and what’s actually going on is getting wider. Boards need to keep up or risk falling behind.
“This is going to be a very, very big year for the world, and we can’t hide from it.” — Audette Exel
See the big global picture and the real risks
Boards can’t only focus on internal numbers anymore. They must look at the bigger risks like new tariffs, disrupted supply chains, climate events, new regulations, and cyberattacks. It might feel overwhelming, but that’s exactly why boards need to talk about it regularly, monitor external risks and ensure relevant insights are brought to the board table. This could include inviting expert speakers from time to time, reading widely, and discussing scenario plans to prepare for different futures. Making space on the agenda for this kind of discussion can help move the board from reactive to proactive.
“We’re seeing a shift in the Global Power Alliance and what the impact is going to be. How’s it going to impact our supply chains, for instance?” — Audette Exel AO
Engage with data, not drama
Boards are increasingly getting caught up in political or emotional debates. But issues like climate and diversity should be treated as serious, data-based risks, not political talking points.
Rather than allowing personal opinions to dominate, boards need to rely on credible data, independent reports, and trend analysis. If something is showing up in your insurance costs, employee engagement scores, or customer expectations, it’s a real issue, not a culture war. Keep conversations grounded by asking: What does the data tell us? What is changing in the external environment? What risks are emerging that we haven’t fully understood yet?
“The increasing trend to polarisation and ideological views can really obscure boards from engaging with the data rather than the drama.” — Audette Exel AO
Use purpose as your compass
Purpose isn’t just a feel-good statement. It’s the reason your organisation exists. And in tough times, it helps guide decisions.
“It’s not just the mission. It’s the organisation’s reason for being. It allows you to align your values, your vision for the future of the business and the organisation’s desired impact.” — Cheryl Hayman
When everyone knows the purpose, it’s easier to decide what’s worth doing and what isn’t. Boards can test every major decision against their organisation’s purpose. If something doesn’t support your purpose, it probably doesn’t deserve your time or resources. Boards should also regularly review whether the organisation’s purpose is clearly defined, understood by key stakeholders, and reflected in how success is measured.
Relentless prioritisation to protect the important work
Too many boards try to do too much. They fill the agenda with minor issues and run out of time for what really matters.
While I often use the analogy about putting the big rocks in the jar first, the key message is this: boards must dedicate appropriate time and energy for the few issues that will have the biggest impact. That may mean redesigning board agendas, trimming down operational reports, or moving lesser items to committees. It also means being disciplined about what the board says no to — not every topic needs board attention. Prioritisation isn’t about ignoring things; it’s about protecting space for the most important work.
“You need to know what business you’re in and why you’re in it. That allows you to find innovative solutions during difficult economic and societal times of change while still trying to retain and create value for your organisation.” – Cheryl Hayman
The legacy you leave behind matters
Board members should always be thinking about the legacy they’re leaving. It’s not just about past financial results. It’s more likely to be about setting up the organisation’s leadership, culture and operations for future success.
Your impact should extend well beyond your term. This requires the board to be thoughtful about those things that are likely to make the biggest difference and add the most value over the next decade and beyond. A great legacy isn’t about personal recognition; it’s about creating something that continues to benefit the organisation long after you’ve moved on.
“Governance is not just about compliance — it’s about crafting the sustainable future.” – Cheryl Hayman
Don’t ignore dysfunction
Our research has found that 25% of all boards are dysfunctional. That means behaviours, relationships, or leadership issues are hurting performance. If you don’t deal with it, things only get worse, which impacts the entire organisation.
It can be tempting to avoid conflict or hope bad behaviour will go away. But dysfunction is rarely a one-off. Left alone, it undermines trust, decision-making, and accountability. Chairs have a critical role in naming the problem and initiating change, but every director has a responsibility, too. External facilitators, regular performance feedback, and clear behavioural expectations can help address the real issues and build a healthier board culture.
The power of relationships, culture and behaviour
Even if the rules and policies are perfect, a board won’t work well without good relationships, trust and respect. Culture matters — a lot. Lots of boards comprise a team of champions, but they’re not a champion team. The way directors interact, how they listen, challenge, support and lead, shapes the board’s effectiveness more than most people realise. Constructive cultures don’t happen by accident. Boards should make time for regular feedback, build relationships inside and outside the boardroom, and support the chair in managing dynamics. Leadership starts with the right behaviours from the top, and directors need to be the first to model the values they expect from others.
The 20 categories of effectiveness every board must master
With the help of Deakin University, we have identified 20 areas that matter most to a board’s effectiveness, including board role clarity, performance management of the board, and board dynamics. High-performing boards are effective in all of these 20 important areas. When one or two fundamentals are weak, it can drag everything else down.
We recommend using a structured board review process that benchmarks your board against other boards in all 20 areas. Don’t rely on gut feel or informal feedback. Get the data, have an honest conversation about where you’re strong and where you’re not, and make a clear plan to lift your performance.
How we help boards stay fit for purpose
At Board Benchmarking, we give boards the tools they need to improve. Our surveys help boards see what’s working and what’s not. We’ve helped over 600 boards improve their performance, effectiveness, and decision-making.
Whether your board needs a full review or just a fresh look at priorities, we can help you get on track and stay there. We work closely with boards to understand their goals, gather honest feedback, and provide clear, actionable insights. The result is a board that’s better informed, more focused, and ready to lead.
Being a board director isn’t easy, but it’s a chance to make a real impact. Great boards lead with purpose, stay focused on what matters, and keep improving. There’s no quick fix, but with the right approach and support, any board can get better. I hope this guide gives you a clear starting point.
