What 2025 taught us about Board Capability Gaps

2025 has been a wake-up call for boards everywhere. As organisations negotiate rapid digital change, geopolitical unpredictability, increasing stakeholder scrutiny, as well as growing Environmental, Social, and Governance (ESG) standards, the role of the board is moving quickly.

Boards are being assessed on agility, tech literacy, sustainability oversight, and strategic foresight – not just on performance as was the case years ago.

And it’s no secret: Many boards are not completely ready to satisfy these obligations.

The Bottom Line

Here’s what stood out in 2025 and what boards need to consider in order to stay fit-for-purpose:

1. Boards still lack the right mix of skills: According to PwC’s 2025 Annual Corporate Directors Survey, only 32% of executives believe that their boards have the right skills mix. Conventional boards – which prioritise operations, finance, and industry – are finding it difficult to adapt. Directors themselves acknowledged that boards frequently lack the knowledge necessary to adequately investigate new risks, question presumptions, or steer businesses through swift change.
2. Digital and AI governance are blind spots: AI and cybersecurity have moved from being just ‘IT issues’ to board-level responsibilities. Few boards fully comprehend AI’s implications for risk, ethics, or value generation, even though many debate it in strategy sessions. Without digital literacy at the top, oversight gaps can soon evolve into organisational hazards.
3. ESG knowledge is still shallow: Even though ESG now impacts reputation, investor confidence, regulatory compliance, and long-term value, many boards still treat it as a compliance checkbox. Few directors feel confident steering sustainability strategy or challenging management, which means that ESG often remains under-leveraged as a strategic driver.
4. Weak succession and evaluation processes: Boards often shy away from hard conversations about performance and renewal. In 2025, many directors acknowledged that some colleagues should be replaced yet formal evaluation and structured succession processes are still rare. Without renewal, boards risk stagnation and misalignment with their business’s evolving needs.
5. Cultural gaps stifle honest challenge: Many boards still prioritise harmony over constructive debate. Too much collegiality can stifle dissenting voices, reduce strategic insight, and weaken governance. A healthy board culture is one that encourages challenge – not just agreement.

Future-Proofing the Boardroom

The world isn’t slowing down. Companies are facing rapid AI integration, geopolitical volatility, an increase in cyber threats, heightened stakeholder expectations, as well as climate and ESG-related risks.

Boards that lack the right capabilities expose their organisations to strategic and governance risk. Boards that can adapt are positioned to lead responsibly, build resilience, and create long-term value.

Investing in ongoing learning that equips directors with the skills, confidence, and perspective needed to build boards that are resilient, relevant, and truly value-driving is critical.

Boards that leverage robust board evaluations are able to assess board performance, identify capability gaps, and strengthen culture and governance practices – ensuring that they don’t just learn, but continuously improve.

Together, these tools help boards to:

• Identify gaps and build the right mix of skills.
• Strengthen oversight on technology, AI, ESG, and strategic decision-making.
• Foster a culture of challenge, accountability, and continuous improvement.
• Implement succession and renewal processes that keep boards future-ready.

Final Thoughts

2025 made one thing clear: Board effectiveness is no longer measured by experience, tenure, or reputation alone. Today, it’s about readiness – the ability to stay relevant, agile, and forward-looking:

• Readiness to learn: Continuously updating knowledge and skills.
• Readiness to challenge: Asking the tough questions and pushing for better decisions.
• Readiness to adapt: Embracing change and navigating uncertainty with confidence.
• Readiness to lead: Guiding organisations responsibly in a fast-moving, complex world.

Boards that cultivate this mindset and equip themselves with the right tools and support are the ones that will drive lasting value and resilience in the years ahead.

Image: © Capture Crew from Pexels via Canva.com