Governing what’s next

2026 Annual Corporate Directors Survey

Key takeaways:

Boards recognize growing capability gaps, but recruitment priorities still favor cultural fit. Among directors who believe a colleague should be replaced, 39% cite insufficient expertise, up from 21% last year. Yet just 27% rate specialized expertise as very important when evaluating new directors, compared with 81% for alignment with the board’s culture and ways of working. The gap is especially relevant as boards face rapidly changing capability needs, including AI.
Core board processes are not consistently delivering the candor and information directors need. Nearly three-quarters (73%) say board assessments could be improved, almost half (49%) say they are not sufficiently candid, and 82% see opportunities to improve board materials. The findings point to a need for more honest evaluation, sharper information, and stronger follow-through.
Directors see substantial room to strengthen strategy oversight. More than four in five (81%) say their boards can challenge management more effectively on strategy. Directors point to clearer metrics, alternative strategic options and trade-offs, scenario analysis, and peer benchmarking as ways to deepen that challenge and build greater confidence in strategic decisions.

Board expertise

As oversight demands expand, boards face a basic question: do they have the capabilities their future responsibilities require? Consistent with last year, more than half of directors (55%) still think someone on their board should be replaced. Among those directors, 39% cite insufficient expertise as the primary reason, up from 21% in 2025. Yet when evaluating prospective board members, directors place much greater weight on cultural alignment: 81% say it is very important, compared with just 27% who say the same about specialized expertise such as AI or cybersecurity.

Artificial intelligence

AI is perhaps the clearest example of how quickly capability needs are changing. More than two-thirds of directors (71%) identify AI as the leading skill their boards need to strengthen to provide more effective oversight, more than twice the next highest response.

Cybersecurity

Cybersecurity is a longstanding board oversight challenge, and AI is adding new dimensions to the risk while raising the stakes for preparedness. More than two-thirds of directors (69%) identify cybersecurity and data privacy as their leading AI-related concern.

Directors rank cybersecurity, data, and IP risks as their top AI concern

Cybersecurity, data privacy, or intellectual property risks

Significant investment without clear returns

Overreliance on AI outputs leading to weakened human judgment

Q: Which of the following AI-related risks most concern you from a board oversight perspective? (select up to three) Base: 561
Source: PwC, 2026 Annual Corporate Directors Survey, September 2026.

Board assessments

Board effectiveness also depends on having a candid way to evaluate individual contributions, boardroom dynamics, and whether director capabilities remain aligned with the company’s needs. Yet nearly three-quarters (73%) of directors say their boards’ assessment processes could improve, and almost half (49%) say assessments are not sufficiently candid.

Strategy oversight

Building and evaluating an effective board helps create the conditions for stronger oversight. That foundation is especially important to the board’s most critical responsibility: overseeing corporate strategy.Yet more than four in five (81%) directors say their boards can more effectively challenge management on corporate strategy.

Market and regulatory environment

More than four in five (81%) say the benefits of being public outweigh the regulatory, reporting, and market-related demands. Views within that majority are mixed: 42% say the balance is becoming less favorable, while 39% say the benefits outweigh the demands.

Looking ahead

Boards that continually refresh their knowledge, strengthen how they work, and challenge management constructively will be better positioned to guide companies through the opportunities and risks ahead. Executives can reinforce that effectiveness by equipping directors with the context they need and being clear about where board judgment can add value. The goal is an adaptable board with the expertise to understand what is changing, the processes to elevate what matters, and the judgment to act when it counts.