2026 begins with a business landscape that is unsettled yet full of possibility. Economic signals are mixed, and geopolitical tensions continue to reshape global markets. Technology (especially AI) is advancing at a breakneck pace, redefining how companies operate and how people work. Talent models are shifting, capital is beginning to flow more freely again, and stakeholders are asking tougher questions about how organizations create long-term value. In short, the ground is still moving underfoot, and companies are striving to stay ahead.
In this environment, the board’s role has never been more central. Directors must serve as steady navigators, helping steer their organizations through uncertainty toward sustainable, long-term growth. The companies whose boards thrive will be those that adapt—by revisiting established practices, embracing new technologies, and staying closely attuned to the evolving landscape. Against this backdrop, five governance trends stand out for 2026 that will shape board agendas and actions in the year ahead.
1. Shareholder engagement shift
Regulatory shifts are rewriting the rules of engagement between companies and their shareholders. In 2025, the SEC took two significant steps that altered this relationship. First, it revised its guidance on beneficial ownership reporting to clarify that large investors conditioning their support on specific company actions could be deemed active (rather than passive) investors. Then, for the 2026 proxy season, the SEC announced that a company may exclude certain shareholder proposals by relying on prior SEC determinations, without needing a fresh review in each case. Meanwhile, proxy advisory firms have signaled they are moving away from one-size-fits-all voting policies. Most recently, a new White House executive order put both proxy advisors and the shareholder proposal process in the crosshairs, directing regulators to reassess whether current proxy voting practices provide sufficient transparency and investor protection. In the near term, these developments could make voting outcomes more varied and less predictable than in the past.
Over the longer term, the implications are far-reaching. Investors who once relied on non-binding shareholder proposals to voice views on governance and sustainability issues will need to find new ways to communicate their priorities. A board and management team that was accustomed to semiannual investor check-ins and gradual relationship-building will also have to recalibrate its approach to gathering shareholder feedback. Traditional engagement playbooks may no longer apply.
As shareholder–corporate engagement continues to evolve, boards will need to be more agile and proactive in demonstrating responsiveness to investor perspectives. In a volatile economic environment, directors should double down on the strong relationships they have built with major investors. Open, constructive dialogue—and a willingness to adapt based on investor input—will be essential to maintaining investor confidence and heading off potential conflicts. A board that stays attuned to these regulatory shifts and adapts its engagement strategy accordingly will be better positioned to earn investor trust.
Takeaways for the board:
- Establish clear coordination between management, investor relations, and the board on engagement and proxy voting objectives. Arrange for directors to receive regular briefings not only on what investors are saying but on where the company is (and is not) getting meaningful feedback.
- With fewer traditional touchpoints, look beyond proxy season to engage investors. Consider third-party forums—conferences, roundtables, or other curated gatherings—to create additional opportunities for ongoing shareholder dialogue.
More information:
2. AI in the boardroom
AI is quickly becoming integral to every aspect of enterprise decision-making, and the boardroom is no exception. In PwC’s latest survey of directors, 35% of board members say their boards have already integrated AI (including generative AI) into their oversight activities, a number we expect to rise in 2026. Directors are beginning to experiment with AI as a strategic partner, using it to digest and summarize voluminous board materials and surface insights from data. AI can also be used in board meetings to aid with decision-making, for benchmarking against peers, enabling scenario planning, and more. By leveraging AI capabilities, the board can narrow the information asymmetry between directors and management.
When applied thoughtfully, AI can equip boards with faster, independent analysis, fueling sharper questions, richer discussion, and better-informed decisions. It gives directors easier ways to obtain information and insights without relying solely on management’s perspective. However, boards must use AI responsibly and with proper guardrails. AI-generated outcomes can have biases and inaccuracies, so human judgment and skepticism remain essential. In addition, directors need to be mindful of data security and confidentiality of company information. For example, they should avoid feeding sensitive company information into public AI chatbots and technologies. In short, AI is a powerful enabler to augment board oversight, but it is no substitute for the experience and intuition of seasoned directors.
Takeaways for the board:
- Develop clear protocols and processes for using AI in board activities. Work with management and legal advisors to set guidelines and guardrails.
- Put ‘AI in the boardroom’ on the board’s agenda. Encourage directors to share how they are using AI, discuss how that use might evolve, and identify risks to mitigate. Invest in ongoing director education on AI to upskill board members on how to use this technology effectively and securely.
More information:
3. Effective board assessments
Board performance is under the microscope. According to PwC’s 2025 Annual Corporate Directors Survey, a majority of directors now say someone on their board should be replaced. Yet even though annual director assessments are a key tool for board refreshment, simply having a process isn’t enough; most directors don’t think their board’s current assessment process yields meaningful insights. Historically, boards have been reluctant to confront underperforming colleagues, but that is changing as expectations for accountability rise.
Forward-thinking boards are now reimagining their approach to assessments, aiming to turn them into a tool for continuous improvement rather than a check-the-box exercise. As investors and other stakeholders raise more questions about how boards evaluate themselves, assessment quality is becoming a focal point. Shareholders may increasingly look at what a company discloses about its board evaluation process as a signal of transparent and responsible oversight. A robust, credible evaluation (one that provides candid feedback even for high-performing directors) reassures stakeholders that the board is committed to constant improvement.
To get more value from assessments, some boards are assessing individual directors as part of their process. Boards that conduct leading-edge assessments are also engaging independent third-party facilitators and tying assessments to concrete follow-up actions. Notably, directors on boards that use an external facilitator are more likely to say their assessments are effective, with 81% agreeing. These elements of the assessment help transform the annual process from a routine formality into a driver of real change and accountability in the boardroom. In practice, that means the review isn’t just filed away; it leads to tangible outcomes, such as identifying gaps to address in the board’s skillset or adjusting board practices to enhance effectiveness.
Takeaways for the board:
- Consider using an independent third party to facilitate the board assessment.
- Follow each assessment with a formal action plan for improvement. Have board leadership monitor the implementation of agreed changes, track outcomes over time, and report progress back to the full board.
More information:
4. From planning to action in a renewed M&A cycle
After a lull, deal-making is gaining momentum once again. With interest rates stabilizing and investor confidence returning, companies are once again eyeing M&A to unlock value and drive growth. Megadeals, in particular, are surging due to interest in AI, digital infrastructure, and the energy transition. As businesses shift from defense to offense, we expect deal activity to continue to expand in 2026.
For boards, this renewed M&A cycle means that acquisition and capital allocation strategies will be front and center in the coming year. Directors should understand how each potential deal aligns with the company’s long-term strategy and whether the expected benefits justify the risks and capital outlay. With strong board oversight, management can balance pursuing strategic opportunities while maintaining operational discipline and prudent use of capital.
In anticipation of increased deal activity, the board should stress-test its own governance framework. Do directors have the right information, processes, and expertise to evaluate complex deals on a tight timeline? If not, the board may need to adjust its committee structures or bring in outside advisors to help. Directors should also agree on clear criteria for deals (and for deciding when to walk away) to maintain discipline in a hot M&A market. Having pre-defined guardrails helps prevent value-destroying transactions made in the heat of the moment.
Takeaways for the board:
- Make sure the board’s governance and expertise can support fast-paced deal decisions. Align committee responsibilities and, if needed, tap external experts so that potential transactions receive rigorous, timely oversight.
- Work with management to continually review the company’s portfolio strategy amid changing market conditions.
- The board should establish clear guidelines for evaluating M&A targets—and be prepared to walk away if they aren’t met.
More information:
5. A renewed focus on CEO succession
CEO turnover remained elevated in 2025, and a notable number of departures were prompted by activist investor campaigns. In fact, according to the latest available research, the year was on track to see a record high number of CEOs leaving under activist pressure, nearly surpassing the peak seen in 2024. Layering a disruptive leadership change on top of business uncertainty rarely delivers the outcomes that boards, shareholders, or activists want. Rather than reacting hastily to external pressure, boards are emphasizing a measured, long-term focus on resilience.
The high rate of CEO turnover is a wake-up call for boards to strengthen their succession plans. Preparing the next generation of leadership is a strategic imperative. Every board should have a structured CEO succession process that covers both emergency interim replacements and long-term successors, aligned with the company’s strategy. This involves defining the skills and qualities the next CEO will need to execute the company’s vision, continually cultivating a pipeline of potential candidates, and regularly reviewing progress on leadership development.
Equally important is normalizing open dialogue about succession. CEO succession should be a recurring topic on the board’s agenda (including candid conversations with the current CEO about eventual transition plans). By making succession planning an ongoing discussion, the board can reduce stigma and make sure it is prepared whenever a change at the top becomes necessary. In short, a board that treats CEO succession as a continuous priority (not a one-time event) will be far better positioned to maintain stability through leadership changes.
Takeaways for the board:
- Make CEO succession and leadership development a standing board agenda item: regularly review and nurture a pipeline of potential leaders, and hold open, ongoing discussions with the current CEO so the topic is destigmatized, and the board has ready candidates when a transition is needed.
- Periodically review the desired leadership profile to reflect changes in market conditions, stakeholder expectations, and long-term business priorities, preparing the next CEO to lead the company forward.
More information:
Contact us
