What High-Performing Boards Will Focus on in 2026
Boards in 2026 must prioritise agility amid economic volatility, tech disruption and regulatory shifts. Directors face growing pressure to evolve from compliance monitors into strategic partners who drive resilience and growth. Here’s how they can rise to the challenge:
- Katia Ciesielska
Set the Context With Scenario Planning
Economic uncertainty demands robust scenario planning and stress testing of core assumptions. According to recent PwC research, 76% of directors say geopolitical instability is their top concern, yet fewer than half conduct regular scenario exercises.
Boards should dedicate agenda time to “what if” discussions covering supply chains, competition and geopolitical risks.
For Luxembourg fund boards, this means modelling 2–5 year horizons under AIFM rules and ensuring resource alignment so that threats are turned into opportunities.
Shape an AI Strategy and Governance Framework
AI is moving from experiment to core operations, requiring clear frameworks for deployment, ethics and risk. Boards must probe management on use cases, bias mitigation and measurable ROI.
A 2024 McKinsey survey found that companies with board-level AI oversight are 2.5 times more likely to see tangible returns from AI investments.
Luxembourg directors should oversee AI in areas such as fund valuation and AML screening, piloting projects to build confidence before full rollout. Equally important is putting policies in place to govern AI use responsibly and tapping external expertise when necessary.
Strengthen Risk and Crisis Resilience
Interlinked risks – from cyber to ESG – call for enterprise wide inventories and predefined escalation paths. Boards gain an edge by linking oversight to incentives and testing response plans regularly.
In funds, prioritise AML cyber overlaps under CSSF guidelines and foster a culture where early signals trigger swift action.
Keeping crisis management plans up to date and subjecting them to regular drills can make a real difference. The most resilient organisations run at least two crisis simulations annually.
Build Talent Pipelines and Robust Succession Plans
Skill gaps in tech, cyber and sustainability undermine execution. Annual board audits reveal needs for diverse expertise, and succession planning should become a standing item, extending beyond the CEO to key roles.
Luxembourg boards should recruit UCITS savvy talent for hybrid workforces and invest in upskilling to retain next generation leaders.
Incorporating board evaluations and peer reviews also helps ensure the right mix of skills and experiences.
Integrate Sustainability and ESG into Strategy
ESG anchors long term value, with boards tying metrics to compensation and demanding audited progress. Regional regulatory flux—such as SFDR for funds—requires flexible reporting that builds stakeholder trust.
For fund managers, embed SFDR compliance into strategy to turn sustainability into a competitive differentiator.
Clear oversight of ESG issues also helps boards navigate political polarisation and regulatory complexity. Leading boards are now linking ESG KPIs directly to executive compensation, with over 60% of S&P 500 companies adopting this approach.
Enhance Board Effectiveness and Tools
Real time dashboards are replacing quarterly silos, offering unified views of risk and performance and enabling between meeting insights. Boards thrive by customising these tools and training themselves on data interpretation.
In Luxembourg, use dashboards for compliance monitoring, sharpening proactive oversight in fast moving markets.
Regular board self assessments and third party evaluations can drive continuous improvement.
Address Shareholder Activism and Regulatory Change
Rising activism and evolving proxy voting policies mean engagement must be year round. Boards should stay informed about new rules – like the EU’s Shareholder Rights Directive II and U.S. proxy advisory updates – and be prepared to explain decisions on pay plans, governance structures and strategy.
Transparency and consistent communication with investors will be critical in navigating more customised voting policies and settlement cycles that are speeding up.
Boards that excel in 2026 will blend strategy, tech fluency and self awareness. By adopting AI responsibly, reinforcing ethics and culture, strengthening crisis preparedness, aligning talent with strategy and engaging openly with stakeholders, directors can steer their organisations through uncertainty.
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