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Brian Kushner
Senior Managing Director, Corporate Finance & Restructuring
brian.kushner@fticonsulting.com
Ellen S. Smith
Senior Managing Director, Corporate Finance & Restructuring
ellen.smith@fticonsulting.com
Pat Tucker
Senior Managing Director, Strategic Communications – Americas Head of M&A, Activism & Governance
pat.tucker@fticonsulting.com
Christine DiBartolo
Senior Managing Director, Strategic Communications – Americas Head of Corporate Reputation
christine.dibartolo@fticonsulting.com
Cory Fritz
Senior Managing Director, Strategic Communications
cory.fritz@fticonsulting.com
Dr. Claudio Calvino
Senior Managing Director, Global Head of Data Science
claudio.calvino@fticonsulting.com
Key Contacts
We invite Corporate Directors to schedule a private, informal Q&A session with experts from FTI Consulting to discuss key issues relevant to your board.
Get Insights for Your Board
With the recent highs that the market has reached, many companies and boards generally believe that the closer their stock is to an annual high, the less likely they are to be blindsided by shareholder activism. Many boards are taking proactive steps to address shareholder activism. Boards need to understand that, in general, an activist has been looking at a company in great detail for months or even years prior to making an outreach. In many cases, they’ve been in communication with your shareholders or know your shareholders as well, or in some cases, better than the company does.”
Brian Kushner, Senior Managing Director, Corporate Finance & Restructuring
What, if anything, does your board monitor to help determine the company’s vulnerability to shareholder activism?
Revenue and earnings growth
Total shareholder return
Executive pay/performance alignment
Increased communication with major shareholders
Diversity of board members
ROIC and capital allocation
Profit margins
Engagement with proxy advisors
CEO-to-employee pay ratio
The board does not monitor shareholder activism
Other
66%
65%
64%
53%
49%
45%
44%
38%
28%
11%
2%
7%
of directors consider shareholder activism the most challenging issue to oversee
32%
of directors reported engagement with shareholders was more frequent
A New Approach to Vulnerability Management
Directors appear to feel less vulnerable to activism with fewer directors considering shareholder activism, and engagement a top priority or a challenge to oversee. Boards proactively track the metrics they believe to be most important to shareholders and have increased their shareholder interactions. With growth, M&A and succession planning on boards’ agendas in the coming year, directors should capture shareholder views on these topics, because proactive communications can mitigate risks, bolster investor confidence and protect company reputation.
6. Shifting Focus on Shareholder Engagement & Activism
Directors understand that corporate communications around polarizing issues increase risk among customers and other stakeholders. While most directors believe a board should be consulted before any public statements are made, companies can mitigate this risk by ensuring all communications are aligned with core business strategy and are consistent with the organization’s purpose, values and corporate story to demonstrate a clear connection to the needs of stakeholders.”
Christine DiBartolo, Americas Head of Corporate Reputation for Strategic Communications
12%
3%
0%
The board has no role/right to play in this matter
13%
The board cannot prevent an officer of the company from speaking publicly about any issue but should be prepared to deal with the backlash
18%
22%
The board should encourage CxOs to speak publicly to reinforce the company’s views and values
30%
The board should get an early notice of the statement and be allowed to weigh in on the risk involved but ultimately has no right to approve/reject the statement
31%
The board has a right to greenlight/redlight public statements but only if they carry a potential risk for the company
50%
30%
The board/company should have the right to take action against a CxO, including the CEO, who makes a public statement that harms the company
53%
The board should work with the CEO to implement guidelines that determine precisely who can speak on behalf of the company and on what issues
57%
61%
Corporate officers represent the company even in their private dealings and should always check with the board/leadership team before making public statements that carry a potential risk for the company
What role should a board play, if any, when it comes to regulating statements made by senior executives on potentially divisive issues, whether they are made on behalf of the company or not?
2017
2025
9%
of directors noted their CEO has voiced an opinion publicly on a potentially divisive political or social issue on behalf of the company
18%
of directors believe the board should encourage C-suite leaders to speak publicly to reinforce company values
The increased polarization in the United States has created a tightrope for C-suites to walk as they debate whether to speak out or act on societal issues. Respondents overwhelmingly believe they face a greater risk of losing customers by taking a stance on an issue. Regardless of the decision made, companies should have clear guidelines on who can speak on behalf of the company and what issues are on and off the table for comment.
Walking the Tightrope
5. Speaking Out on Societal Issues
How would you rate the risk level of the following events for your company, in terms of how significant their impact would be on the strategy?
22%
48%
28%
2%
Continuation, resurgence or emergence of geopolitical event in a region of operation
No or negligible impact
Some impact
Significant impact
Detrimental / No comeback from this
8%
53%
38%
2%
No or negligible impact
Some impact
Significant impact
Detrimental / No comeback from this
Unfavorable political or regulatory environment (e.g., policies, taxes)
As directors look to accelerate growth in 2025, smart leaders are responding to political and regulatory uncertainties by pressure-testing scenario plans and expanding strategic advocacy frameworks. In this rapidly evolving landscape, moving early is crucial to success.”
Cory Fritz, Senior Managing Director, Strategic Communications
10%
of directors prioritize managing geopolitical risks including nearshoring and onshoring
53%
of directors expect an unfavorable political or regulatory environment to have some impact on their strategy
Given the volatile environment facing companies, most board members recognize the importance of global supply chain risks and regulatory challenges. Most respondents whose companies have international exposure view geopolitical events as a threat to their business strategy; however, few noted improving regulatory compliance or managing geopolitical risks as a top priority. Companies with cross-border interests in highly regulated industries sensitive to political volatility face heightened risk. Scenario planning, including crisis and communications strategies, is essential for effective risk management.
Heightened Risk and Limited Safeguards
4. Evolving Supply Chain, Regulatory & Geopolitical Environment
Optimizing operations and costs
Enhanced workforce productivity and satisfaction
Better/more data and reporting
Customer service and support
Innovation & product/service enhancements
Marketing and communications (e.g., content)
Performance monitoring and evaluation
Recruiting and development
Other
None
42%
42%
38%
38%
33%
17%
13%
5%
1%
0%
Around which function do you see the biggest opportunities with AI/Generative AI?
80%
of directors say their company has taken some action regarding the development and deployment of AI
32%
of directors view “lack of internal capabilities or knowledge among the leadership team” as the biggest risk for businesses using Generative AI
Ensuring Board Awareness and Understanding
A clear majority of directors noted their companies are taking action with respect to AI, most commonly incorporating the technology into one or more areas of their business, including products and services. With this growing adoption, boards are taking note and 37% of respondents noted they require the CTO or senior leader in charge of AI to be present when AI is discussed.
3. Adoption of AI into Business Operations
51%
of directors say their board has reviewed its process for identifying and disclosing an incident, including updating its reporting requirements and actively engaging in regular risk assessments, vulnerability testing and incident response exercises
Is Cyber Resilience on Your Board’s Agenda?
RELATED ARTICLE
Companies are better prepared to mitigate cyber risks today than in years past, but I worry this might be creating a false sense of confidence. In my experience, I rarely see companies create contingencies around how strategies, especially long-term growth plans, would be impacted by a significant incident. Reallocating resources, transforming cybersecurity programs and rebuilding the trust of stakeholders can all potentially delay strategic goals.”
Jordan Rae Kelly, Head of Cybersecurity for the Americas
61%
of directors say a major cyber incident would have a significant impact on their company’s strategy
71%
of directors say the senior leadership team member responsible for cybersecurity at their organization (e.g., CISO, CIO) regularly meets with the board
But a Disconnect in Turning Awareness into Action
Cyber threats are an established point of discussion for boards, but implementing effective strategies to address them remains a challenge. While most directors noted their board regularly meets with cybersecurity leaders, an essential step in cyber risk mitigation and crisis communications planning, just 51% of respondents have reviewed incident identification and disclosure processes. This indicates many boards are not helping support the implementation of protections, leaving organizations vulnerable to cyber attacks and regulatory penalties.
2. Increased Awareness of Cybersecurity Risks
If you were charged with setting the agenda for your next meeting, which of the following topics would you include as most pressing for your board to discuss as we head into 2025?
Growth strategies
M&A transactions and opportunities
CEO/C-Suite succession
Financial conditions and uncertainty
Competition
Product/service innovation
Digital transformation (including AI risks and opportunities)
Cybersecurity/data privacy
Business continuity/crisis planning
Regulatory compliance
Workforce planning
Shareholder engagement/activism
Executive compensation
Environmental/sustainability strategy (including reporting)
Other
78%
47%
43%
43%
31%
30%
29%
27%
18%
17%
14%
11%
8%
7%
3%
As growth returns to the top of the board agenda, M&A comes with it as an attractive way to accelerate strategy. However, M&A is not a simple shortcut to growth. There needs to be a critical evaluation of transaction execution plans to ensure that investors are satisfied with price and value creation strategies, that regulators appreciate the competitive dynamics, and that talent considerations buy into the long-term strategy.”
Pat Tucker, Americas Head of M&A, Activism & Governance for Strategic Communications
Directors are feeling more in control and optimistic, with respondents choosing “pursuing growth” as their top priority in 2025. Many observers expect 2025 will bring a less-regulated or scrutinized framework for dealmaking, coupled with lower interest rates, creating an improved M&A landscape. Directors are increasingly interested in discussing M&A at their next board meeting, and it is climbing the list of expertise directors want to add to their board with their next appointment.
76%
of directors selected “pursuing growth” as their top priority for their company in the year ahead
37%
of directors noted “integrating M&A transactions, both prior and future” as their top priority, an increase from 2023
A Growing Priority on Board Agendas
1. The Improving M&A Landscape
FTI Consulting partnered with Corporate Board Member and Diligent Institute in late 2024 to survey directors of publicly traded companies in the United States about their company’s top priorities, potential disruptors and other pressing topics on the board’s agenda in 2025.
After years of cost-cutting and streamlining financials, directors are prioritizing growth through mergers and acquisitions. Directors also noted interest in exploring the opportunities presented by AI to enhance operations and workforce productivity.
Despite the anticipation of growth and promised benefits of AI, directors shared concerns about cybersecurity, the shifting geopolitical landscape, supply chain disruptions and international regulatory challenges.
Volatile political and business environments coupled with growing social pressures are a perfect storm for corporate reputation, and boards are aware of the potential risk exposure.
Learn more about how directors anticipate navigating these opportunities and challenges.
A Changing Risk Landscape
Brian Kushner
Senior Managing Director, Corporate Finance & Restructuring
brian.kushner@fticonsulting.com
Key Contact
ABOUT THE REPORT
IN THE REPORT
What Directors Think
A Changing Risk Landscape
An FTI Consulting, Corporate Board Member and Diligent Institute Report
of directors believe M&A transactions and opportunities are most pressing for their board to discuss in 2025
47%
of directors say their board has reviewed its process for identifying and disclosing a cybersecurity incident
51%
of directors believe AI/Gen AI has the potential to optimize operations and costs
47%
of directors of companies with international exposure view geopolitical risks as a threat to their business strategy
79%
of directors consider shareholder engagement and activism to be a top priority for their organization
11%
of directors believe there is a greater risk of losing customers by taking a stance on an issue rather than refraining to take a stance
85%
PAGE 3
The Improving M&A Landscape
PAGE 5
Increased Awareness of Cybersecurity Risks
PAGE 7
Adoption of AI into Business Operations
PAGE 10
Evolving Supply Chain, Regulatory & Geopolitical Environment
PAGE 12
Speaking Out on Societal Issues
PAGE 15
Shifting Focus on Shareholder Engagement & Activism
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Global Public Affairs Newswire
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Activism Vulnerability Report
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The Power of Leadership Voices in Digital Communications
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Export controls, sanctions and trade tariffs are all tools that will continue to be used in the current environment. It is critical that companies seek to proactively prepare their business for these volatilities and establish a response plan to mitigate the impacts.”
Matt Bell, Senior Managing Director, Export Controls, Sanctions and Trade
Jordan Rae Kelly
Senior Managing Director, Head of Cybersecurity for the Americas
jordan.kelly@fticonsulting.com
Meredith Griffanti
Senior Managing Director, Global Head of Cybersecurity and Data Privacy Communications
meredith.griffanti@fticonsulting.com
Cecily Gooch
Senior Managing Director, Corporate Finance & Restructuring
cecily.gooch@fticonsulting.com
Ellen S. Smith
Senior Managing Director
ellen.smith@fticonsulting.com
RELATED INSIGHTS
1. The Improving M&A Landscape
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