Board Governance Part 1 - Overview and Trending Topics
Boards of directors are under increasing pressure to respond to more and more challenging circumstances of doing business. From environmental, social and governance (ESG) initiatives and cybersecurity threats to workforce well-being and ethical artificial intelligence (AI), the issues boards face are more dynamic than ever before.
Strong board governance is the foundation that allows companies to respond with agility, transparency and accountability. Without it, an organization’s strategic goals are easily derailed, trust is eroded and value is lost.
For investors, employees, and customers alike, governance is (or at least should be) front and centre.
This article provides a broad overview of board governance and explores key trends shaping boardrooms today.
What is board governance?
According to the Governance Professionals of Canada:
Corporate governance in Canada involves regulatory and market mechanisms, and reconciling the roles and relationships between numerous corporate stakeholders within an organization and the governance goals within a corporation.
More simply put, board governance refers to the framework of rules, practices and processes by which a company’s board of directors ensures its strategic goals are achieved.
At its core, it defines how decisions are made at the highest level of an organization and how performance is monitored.
Good governance involves setting the company’s strategic direction, monitoring financial health as well as ensuring legal and ethical compliance.
Key responsibilities of a board of directors include tasks such as defining the vision and strategic priorities, overseeing financial and operational performance, and risk management.
5 trending topics in board governance
As the expectations placed on boards continue to grow, directors and other leaders within an organization must stay informed on the latest governance trends to remain effective. Below are five pressing issues currently shaping board agendas in Canada and around the world.
1. Using AI to promote good governance
AI is quickly becoming an essential tool in board governance.
In 2024, Deloitte surveyed approximately 500 board members and C-suite executives across 57 countries to understand how involved boards have been in the governance of AI. Unfortunately, 45% of respondents said AI had not made it to their board’s agenda. However, when it is on the board agenda, 46% discussed the topic at the full board level.
Many boards are recognising that an effective AI governance strategy should be a key focus as AI becomes more embedded in daily operations.
Boards must ensure that oversight structures are in place to manage both the opportunities and risks that AI presents. They should examine how data is sourced, how AI models are applied, and whether those uses are consistent with the organization’s values, social responsibilities and confidentiality requirements.
Just as with data privacy, transparency is a cornerstone. Stakeholders should understand how AI is used and what risks it carries, which helps build trust and reduce potential harm.
2. Creating a psychologically healthy corporate culture
Workplace culture is a board-level responsibility. The Canadian Centre for Occupational Health and Safety places an emphasis on the importance of psychological health and safety, stating:
An organization that has a health-focused culture enhances employee well-being, job satisfaction and organizational commitment, which helps to retain and attract employees. A work culture with social support also enhances employee well-being by providing a positive environment for employees who may be experiencing psychological conditions such as depression and anxiety.
Toxic cultures have led to major scandals and reputational damage for organizations across various industries. In contrast, a psychologically healthy workplace boosts productivity, reduces turnover and enhances stakeholder trust.
Boards are increasingly being held accountable for ensuring that executive leaders foster an inclusive, respectful, and safe work environment. Indeed, the Canada Labour Code recognizes psychological health as a workplace responsibility. The Work Place Harassment and Violence Prevention Regulations even require federally regulated employers to conduct workplace assessments including psychological hazards as well as develop prevention policies addressing psychological harm.
Ultimately, a psychologically healthy workplace is both a moral imperative and a business advantage. Governance plays a crucial role in achieving it.
3. Having an ethical brand
Ethics and brand reputation are now deeply intertwined. Consumers are more socially conscious than ever, and investors are increasingly applying ESG filters to their portfolios.
Boards must ensure that their company’s stated values align with operational reality. Misalignment (like claiming environmental leadership while engaging in greenwashing) can cause irreparable harm to brand credibility.
The question boards must constantly ask is: Does our brand inspire trust and align with the values of our stakeholders?
4. Fighting cybercrime
Cybersecurity is a top governance issue that can no longer simply be left to the IT department. The frequency and severity of cyberattacks continue to grow, exposing companies to legal, financial and reputational damage.
Boards are expected to play a more active role in cyber risk oversight, ensuring that adequate frameworks, resources and response plans are in place. This includes regular briefings from Chief Information Security Officers (CISOs), testing incident response protocols and maintaining board-level cyber expertise.
The Canadian Centre for Cyber Security’s National Cyber Threat Assessment 2025-2026 deemed that ransomware was the top cyber crime facing the country’s critical infrastructure. It predicted that:
In the next two years, ransomware actors will almost certainly escalate their extortion tactics and refine their capabilities to increase pressure on victims to pay ransoms and evade law enforcement detection.
Directors must ask: Are we doing enough to secure not just our systems, but those of our ecosystem?
5. Creating a strong data infrastructure
Data is what drives smart decision-making, and decisions that are not based on data are doomed to fail. This is why it is critical for boards to invest in an infrastructure to collect, store, protect and govern data.
As the Business Council of Canada has recognized:
Without exception, Canadian companies regard the emerging data-driven economy as an enormous opportunity to grow and compete globally. Data is helping them run their businesses better, collaborate with partners, and create value for their customers.
A strong data infrastructure requires clear governance policies, robust analytics capabilities and defined ownership. This includes policies for data classification, access controls, data sharing, and compliance with Canadian privacy legislation.
In an age of misinformation and data breaches, trust in a company’s data practices is now a competitive advantage. Boards must lead the way by championing transparency and investing in data governance capabilities.
Looking for strategies to promote good governance?
Strong board governance is essential for building a strong, profitable and ethical company.
But navigating these changes requires more than good intentions. It takes the right strategies, tools and expert guidance.
The team at Axxima is here to help.
Whether you’re a board director or C-suite executive, Axxima offers tailored consulting designed to help you strengthen your governance practices and future-proof your organization.
Get in touch today to learn how Axxima can support your board’s journey toward excellence and resilience.
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