Priorities for directors operating in a more complex, less predictable world 5 min read
For Australian directors, 2026 marks a transition from governing through disruption to governing in a world where disruption is the baseline. The forces shaping boardroom agendas—regulatory intensity, stakeholder expectations, technological acceleration and geopolitical uncertainty—aren't new, but they're converging and accelerating at the same time. This will test not only BAU operations and compliance systems, but judgement, culture and the fundamentals of board decision-making.
We enter the new year with an agenda that is both crowded and expanding. Climate and sustainability reporting has moved from aspiration to execution. Cyber and data issues have shifted from IT risk to existential risk. And artificial intelligence is forcing boards to grapple with accountability for decisions shaped (at least in part) by machines. For experienced directors, the challenge is not learning new rules but recalibrating how familiar duties are discharged in an environment where expectations—legal, regulatory and societal—are shifting at pace.
Yet complexity also creates opportunity. Directors who remain curious, challenge assumptions and look ahead can strengthen their contributions to strategy, culture and long-term performance. Successful boards in 2026 will not be defined by the risks they avoid, but by the value they help unlock at a time when many organisations—and economies—are at inflection points. Directors who cut through noise and engage directly with their risk environment, rather than managing around it, will be best placed to prioritise what truly matters to make confident, well-informed decisions.
Against this backdrop, the practical question for directors becomes: where should directors focus first? In this Insight, we set out the areas we believe deserve directors' attention in 2026 to use governance as a platform for performance and position their organisations for success.
Geopolitical uncertainty is now a defining feature of global markets—and of the operating environment for boards. Already in 2026, there have been fresh threats of punitive tariffs between Western economies and extraordinary speculation of military action between nations previously thought to be united in iron clad alliances. As confrontation replaces collaboration, this reshapes the assumptions on which capital allocation, growth plans and risk appetite have traditionally been based, and challenges directors to adopt a more deliberate, adaptive approach to oversight.
This generationally remarkable shift away from multilateralism was captured starkly in Canadian Prime Minister Mark Carney’s address at Davos, where he observed that the fundamental assumptions underpinning Western society are in a state of flux. Carney’s message for the business community was not that volatility is increasing (boards have long dealt with volatility) but that the anchors on which markets and institutions have relied for decades are loosening as part of 'a rupture, not a transition'.
Through this lens, 2026 intensifies many of the same pressures directors have been managing since COVID-19 disrupted the assumptions of a globalised economy. Questions about how to secure supply chains, maintain market access and preserve predictable capital flows have returned as the tectonic plates of the rules-based international order continue to shift.
The pandemic showed how quickly assumptions can fall away—from the reliability of open borders to the notion that shocks are temporary rather than structural. Today, the intuition that guides board judgement needs to be retested. Long-held beliefs are no longer givens: that capital will always be mobile, that geopolitical instability will pass quickly or that our allies will inevitably respond if called upon.
"In this geopolitical climate, boards that continue to rely on inherited frameworks designed for a more predictable world risk being caught flat-footed. Unconscious assumptions must be brought to the fore and checked, and orthodox thinking ought to be challenged, or at least put to proof. Effective governance requires curiosity, judgement and a willingness to challenge legacy thinking—plus a bit of courage". – Andrew Pascoe, Partner
AI and cyber issues continue to evolve at pace and dominate board agendas, though they are often discussed and addressed in siloes. In 2026, boards will continue to grapple with the rapidly developing opportunities and risks presented by emerging technologies like agentic AI and quantum computing. The challenge will be to refocus attention on two related themes: (1) what is required to protect and grow the value being created by their complex digital business systems, and (2) how to develop resilience to the systemic changes shaping the global economy and society.
This will require directors to not only ask the right questions, but to also understand the answers and—most importantly—the strategic and operational impacts on the business. Put another way, directors must abandon any notion that technology—AI or otherwise—is too complex to be understood. Despite growing recognition that AI developments and cyber threats are business risks (as opposed to technology risks), boards will nevertheless need to be thoughtful about integrating relevant expertise into, or at least around, the boardroom to ensure effective oversight of both the risks and opportunities.
At the same time, the pace of innovation and scale of related impacts mean that governance frameworks need to be designed or uplifted to smooth the path for responsible experimentation. As directors support management teams to play offence and defence at the same time, boards will be expected to familiarise themselves with the competitive and threat landscape and understand how these developments will or should impact a company's business model and strategy.
And beyond this, there is room for boards to turn their minds to broader ethical and societal issues arising from this AI paradigm. It is not enough for a board to dismiss such issues as 'policy' matters for government. We think many of the questions that might initially be characterised as ethical or policy considerations will quickly collide with, and morph into, operational, financial and direct risk issues for a business.
"Above all, boards will need to set the tone for an adaptable, resilient, learning culture, and understand the contributions of their workforce—including by identifying and nurturing the contributions (like vision, creativity and judgement in the fact of tough calls in ambiguous situations) that are uniquely human". – Valeska Bloch, Partner and Head of Cyber
Regulatory enforcement settings have shifted meaningfully heading into 2026, with a sharper focus on how directors anticipate, interrogate and respond to regulatory risks. Regulators, including ASIC and AUSTRAC, are scrutinising not only entity conduct, but also the extent to which boards and individual directors are discharging their obligations at law. In several recent regulatory investigations with which we’ve been involved, resolution pathways have become complicated, with board obligations and/or directors’ duties being tested as part of the investigative process.
For directors, the practical lesson is the need for a deeper, more proactive understanding of regulatory risks. Enforcement outcomes are increasingly shaped by governance fundamentals: clear escalation pathways, risk reporting that is timely and unfiltered, and an environment where directors are willing—and expected—to probe and test management assurances.
Directors should ensure that material regulatory matters are elevated early, that the board has visibility over material regulatory decisions and that decisions reflect a disciplined connection between risk appetite and compliance settings. In this environment, 'getting the basics right' is no longer procedural—it is a core form of regulatory risk mitigation. Directors who maintain active curiosity, apply well-reasoned judgement and create clear traceability between decisions and organisational outcomes will be best placed to navigate an increasingly assertive enforcement landscape.
"Business moves quickly. Regulatory investigations often occur years after events and incidents, long after memories have faded. Directors should think about how, if required, they would evidence that they took reasonable steps to understand the material risks or incidents faced by the organisation they oversee and how those risks or incidents are addressed. This should include evidence of challenging management and obtaining assurance those risks or incidents are being appropriately managed or addressed". – Chris Kerrigan, Partner
In the years since the Paris Agreement there has been a proliferation of voluntary stakeholder initiatives and corporate commitments to address climate change. However, as the planet has continued to warm and we increasingly experience the impacts of climate change, we find ourselves in a world where the global multilateralism that gave way to the Paris Agreement is faltering and energy security has emerged as a central concern among geopolitical tensions.
In this environment, and having come further up the learning curve in the years since the Paris Agreement, many companies globally are taking a more nuanced look at their climate commitments. It is an apt moment for directors to test management on whether the assumptions and dependencies underpinning their targets have changed, whether the target itself remains achievable, whether the implementation pathway remains appropriate and whether an organisation-wide transition plan ought to be developed to firm up the pathway to net zero—particularly as the first wave of large Australian companies will commence publishing their first sustainability reports under Australia's climate-related financial disclosure (CRFD) regime.
Directors of particularly exposed businesses will also need to further enhance their approach to nature-related risk. The World Economic Forum's Global Risks Report 2025 captures the results of a survey of 900 experts worldwide, who were asked to estimate the likely impact (severity) of certain risks. Biodiversity loss and ecosystem collapse ranked second over a 10-year period, second only to extreme weather events. The concept of nature risk governance is not new—and the Global Risks Report tells us they, along with other environmental risks, aren't front of mind in the short term—but higher performing boards in sectors that are highly dependent on natural resources and ecosystem services must drive continued development in the capability of their organisations to assess, quantify and mitigate these risks. Ten years isn't that far away.
"Deep, meaningful climate disclosures have faltered in a number of jurisdictions, leaving Australia to have its 'Steven Bradbury' moment as a front runner in world's best practice disclosures. This is an exciting and daunting time for Australian directors, but an excellent opportunity for climate strategy health checks that will benefit organisations beyond the reporting cycle". – Jillian Button, Partner and Head of Climate Change
We expect 2026 will be a demanding year for boards. Directors face higher expectations, more complex risks and closer scrutiny—but they also have greater opportunity to shape outcomes through thoughtful, engaged oversight. The challenge is real, but so is the opportunity.