In the recently released report, “2025 Shareholder Meeting Agenda,” BDO sought to identify the major concerns for boards entering this year's proxy season. We spoke with Amy Rojik, corporate governance national managing principal, and one of the authors of the report, to get an inside look at the issues facing directors as we move toward 2026.
Directors & Boards: Looking at BDO's report, “2025 Shareholder Meeting Agenda,” what 2024 trends do we expect will continue to be major issues for 2025 shareholder meetings and proxy season?
Amy Rojik: Boards are entering this year's proxy and shareholder meeting season under a backdrop of significant change, but 2025 should not be a year where directors should be overly focused on looking in the rearview mirror. To be sure, the geopolitical unrest and economic volatility we saw in 2024 will remain critical issues for shareholders, but the level of complexity has increased due to uncertainty around the impacts of tariffs and supply chain concerns, potential changes to tax policy, remaining high interest rates and high prices and multiple presidential executive orders still being assessed. Boards are recalibrating to better assess the risks behind these evolving market conditions and continuing the war for talent, while simultaneously focusing on the regulatory volatility and opportunities as well as risk in implementing emerging technology compounded by increasing sophistication of cyber threats.
DB: As we move into 2025 trends, how big of an issue do we expect AI to be for directors and business leaders?
AR: AI is one of the biggest issues directors and business leaders need to focus on in 2025. Shareholders are focusing a great deal of their attention on AI and other emerging technologies, and the announcement of China's DeepSeek AI platform sent shockwaves through financial markets. The result has been greater investor scrutiny on oversight, responsibilities and disclosures related to AI, including increased spending and the business case behind those investments.
Adding to the complexity are new regulatory frameworks like the European Union's AI Act, which represents the most comprehensive legal and regulatory framework to date and impacts U.S companies that develop or deploy AI systems in the EU. Additionally, understanding existing and new U.S. state-level rules (e.g., Colorado, Illinois, New York City and others pending in Connecticut, Massachusetts, New Mexico, New York and Texas) in the absence of a comprehensive federal regulation aim to regulate “automated decision-making” along with privacy laws. Understanding the ramifications of noncompliance is going to be an ongoing topic of conversation in a lot of boardrooms.
DB: What are some of the issues that we expect will be focused on in the areas of corporate governance and talent management?
AR: In addition to the governing aspects related to emerging technology and cyber concerns, oversight of talent management, management succession planning, executive compensation, board composition and director refreshment will likely be at the forefront of the 2025 proxy season.
On the talent management front, ensuring continuing development and upskilling for employees in an age of emerging technology is being further embedded in corporate strategic plans. Emphasis on high turnover statistics at the CEO and C-suite levels have boards evaluating current succession planning and considering how to enhance their pipelines of executive-ready candidates, both internal and external, along with how management is preparing leaders one or more levels below.
Meanwhile, investors remain focused on composition within the boardroom. Driven largely by the need for increasing knowledge and oversight of traditional and emerging risks and opportunities, shareholders are increasingly expecting boards to maintain “fit for purpose” directors. This means shareholders want to be assured directors have the necessary skills and experience to effectively contribute to the company’s success. Consideration as to whether individual boards may need directors with specific expertise in areas that are increasingly significant to the company's strategy are rising. While it is potentially easier for larger companies with large boards to recruit board members, for many smaller to mid-size company boards, the ability to attract and replace existing directors or expand their boards by enticing such directors can prove incredibly challenging and may require expanding networks to identify director candidates. What all boards can do, however, is make continuing education a priority on emerging risk topics, leverage internal and external subject matter expertise and elevate the ability of directors to request better information, ask pertinent questions and hold management accountable.
As we see with the need for all directors to be “financially literate,” there is a growing need for board members to be “literate” in technology and implementation, data and cyber risks, industry-specific topics and other areas deemed as critical to the strategy of a particular business.
DB: Do we expect that there will be more of a concentration on executive succession planning this proxy season and have the events of recent months resulted in any sort of change in the area of executive security?
This is an issue that has likely kept many board members up at night. Succession planning has always been considered a chief responsibility of the board, and 2024 saw the departure of approximately 2,200 CEOs. However, while the majority of boards have a multifaceted plan covering the near- and long-terms to reflect changing business conditions, the turnover numbers and events of the last few months have certainly placed a public spotlight on the need for robust succession plans, but also on safeguarding executives.
The ability to simply swap out one executive for another can be incredibly challenging. Leadership, industry and operational experience, cultural fit and strategic vision and execution, in addition to many other characteristics, all require consideration. If companies do not have a pipeline of “ready-to-go” individuals, along with a transition plan to be executed at a moment's notice, boards often need to consider who among them may be fit to serve in an interim executive capacity. People are the greatest asset a business has. As recent events have brought executive security into the spotlight, shareholders will want to know if the risks requiring executive security are being well managed, as well as the costs of doing so. The SEC has existing guidance within a two-step framework for determining whether executive security qualifies as a business expense or should be treated as part of an employee's compensation. Regardless of this debate, boards need to consider the threats, vulnerabilities and consequences when determining how to best protect their company leaders. They must also be prepared to answer questions from shareholders on how the company views additional safety expenditures as part of the organization's overall risk management strategy. Confidence in corporate leadership can make or break a company.