The Evolving Nature of Board Standards and Investor Expectations

Corporate governance often escapes broad public discourse; it is instead addressed in environments where decisions are vetted through the prism of long-term growth and compliance with global capital market standards. In Kazakhstan, interest in this area has gone through various stages: at times, it became a symbol of aspirations toward the best international standards, while in others, it gradually gave way to more pragmatic agendas. 

Today, as countries in the region strengthen their governance models and strive to become more predictable for large investors, interest in corporate governance is seeing a significant resurgence. Almaz Sadykov, Partner at PwC Kazakhstan and Leader of PwC's Sustainable Development Practice in Eurasia, discussed how global and local practices are changing and what this means for those who shape organizational development strategies. 

- To start, I would like to establish a broader context. Which global corporate governance trends do you view as the most transformative for the current market?

- I would like to highlight right away that for serious investors corporate governance is a primary signal of trust—essential for assessing both individual companies and viewing a country as a whole. Consequently, governance frameworks are in constant flux; we are currently witnessing a cycle of profound rethinking as global companies and national institutions redefine the role, functions, and operating standards of the board of directors. 

It is interesting to hear what the directors themselves have to say. At PwC, we conduct an annual survey of BoD (Board of Directors – Ed.) at the largest international companies with market capitalizations exceeding USD1 billion. The results of the latest survey showed that many boards are reconsidering their role and recognizing the need to enhance their oversight effectiveness and individual director accountability. 

For the first time in the more than twenty-year history of our survey, a majority of directors indicated the need to replace at least one board member. This is primarily due to insufficient input into key discussions. Many cite the excessively long tenure of some BoD members, which reduces their engagement and prevents the board from meeting modern governance standards. Despite this recognized need for refreshment, discussing the poor performance of individual colleagues remains a complex topic.