Governance in Focus: Thriving in a Changing World

What story is your board still telling — and is it holding you back in a world of systemic disruption?

In an era marked by technological acceleration, geopolitical unrest, and environmental urgency, the legacy narrative of governance, rooted in oversight, structure, and risk aversion, is wearing thin. If boards continue to operate by yesterday’s playbook, they risk becoming spectators rather than stewards of the future. Governance must evolve from a rigid framework of rules into a living system of values, context-aware decisions, and ethical foresight. A new narrative is needed—one that embraces uncertainty not as a threat, but as an opportunity for meaningful transformation.

To thrive in a disrupted world, governance must stretch beyond compliance to encompass culture, purpose, and long-term vision. This edition presents insights from the 2025 IESE-ECGI Corporate Governance Conference, as well as recent thought leadership on geoeconomics, economic nationalism, and fractured globalisation. We explore how shareholders, directors, and institutions can co-author a new story—one of regeneration, relevance, and resilience—where governance becomes not only a system of accountability but also a driver of creativity and shared value.

1. Culture Is Strategy in the Boardroom 

Cultural governance is not a soft subject. It is a strategic imperative. When culture is integrated into governance, the conversation shifts from policies to people, from control to creativity. One panellist captured it succinctly:

“It’s not so much about rewriting governance, but rewriting the culture that governs it.”

Every boardroom operates with a narrative about its purpose, values, and role in society. In times of leadership transitions, strategic pivots, or crises, these stories are tested. Boards that cling to a risk-averse, compliance-driven mindset may find themselves out of sync with their environment. True governance transformation begins with rewriting these internal narratives. Directors must actively shape boardroom conversations to foster curiosity, empathy, and a sense of moral duty. Shareholders must champion this change, insisting on a culture that supports agility, inclusivity, and intergenerational responsibility. Strategy does not live in spreadsheets; it lives in stories, rituals, and the shared language of leadership.

2. Shareholders as Strategic Stewards, Not Just Capital Providers 

Jordi Canals reminded us: while the board steers governance, shareholders provide the balance. In today’s fast-changing world, their role goes far beyond capital. Without their alignment—from AI to decarbonisation—governance risks drifting without direction.

The traditional image of shareholders as silent investors must give way to a more collaborative vision. Long-term investors, especially institutional ones, must step up as stewards of resilience and strategic transformation. They are uniquely positioned to push for ethical transitions in business models and encourage sustainable innovation. This requires abandoning a purely financial lens and embracing broader, value-creating roles. As co-authors of governance, shareholders must ensure that their engagement is not episodic or superficial but deeply attuned to the systemic changes companies must navigate. In this emerging governance paradigm, investors are not just voting on policies; they are shaping futures.

3. Purpose Is the Anchor: From Founder’s Vision to Institutional Backing 

Colin Mayer emphasised that a clear and functional corporate purpose is essential for navigating disruption. Purpose is not just a branding exercise—it connects strategy, culture, and governance. In family businesses, purpose may stem from the founder’s vision; in mature companies, from a CEO’s aspiration to make the firm distinct. In all cases, that purpose must be understood, believed in, and supported by shareholders to be effective.

Purpose gives companies their moral compass and strategic direction. It determines how they make decisions, prioritise investments, and measure success. A well-articulated purpose can inspire employees, build trust with stakeholders, and differentiate the firm in the marketplace. But purpose without alignment is fragile. Shareholders play a critical role in translating purpose into policy by reinforcing it through their expectations, voting behaviour, and engagement practices. In a governance model fit for the 21st century, purpose is not peripheral—it is the foundation of credibility and continuity.

4. Institutional Investors: Passive Ownership, Active Consequences 

Mireia Giné’s research laid a significant flaw in today’s governance ecosystem: many institutional investors underinvest in governance engagement. Their fiduciary duty is often directed toward end investors, not the companies themselves. This creates a vacuum in moments when bold board action is needed most.

Institutional investors must redefine their fiduciary responsibility to include proactive stewardship. Ownership without engagement leads to a deficit of accountability and stagnation in board evolution. When critical strategic decisions arise—from mergers to mission shifts—boards need engaged investors to provide support and challenge. Ignoring governance until crisis strikes is no longer viable. Active engagement means participating in shaping leadership pipelines, sustainability agendas, and long-term strategies. The consequences of passivity are not neutral; they reinforce inertia and undermine innovation.

5. ESG Under Fire: Boards in the Crosshairs 

As public institutions scale back regulation and the political climate becomes more polarised, companies find themselves navigating ESG expectations without clear guidance. In this vacuum, boards must step up.

The conference made it clear: ESG is evolving, not evaporating. Amid ideological debates and market scepticism, the fundamentals of environmental stewardship, social inclusion, and governance integrity remain crucial. A resilient board culture—one grounded in integrity, curiosity, and courage—is essential. Such culture equips boards to stay the course when ESG initiatives face backlash. Instead of retreating, they must recalibrate, ensuring that ESG strategies are evidence-based, mission-aligned, and transparently communicated. In polarised times, values-driven governance is not a luxury; it is a lifeline.

6. Divestment as Strategic Voice 

Marco Becht’s work on divestment campaigns offers a new lens: divestment is not merely a moral gesture but a strategic signal. Viral pledges to divest from carbon-intensive sectors don’t just shift portfolios; they reshape market perceptions of risk and reshape behaviour across entire industries.

Divestment, when embedded in a coherent cultural and governance narrative, becomes a form of shareholder activism that transcends protest. It demonstrates alignment between belief and action, reinforcing trust in a firm’s commitments. Divestment can catalyse sector-wide change, as it shifts public perception, investor behaviour, and regulatory landscapes. The power of symbolic acts lies in their ability to trigger real economic consequences and inspire others to follow. Shareholders must wield this tool responsibly and strategically, not as a gesture of virtue signalling but as a call for transformative accountability.

7. Governance at the Crossroads: Diversity, Decarbonisation & Geopolitical Risk 

From Luc Renneboog’s exploration of diversity policy support to Xavier Vives’s work on the antitrust risks facing decarbonisation alliances, and Curtis Milhaupt’s analysis of corporate governance in an era of geoeconomics, it’s clear that governance is being asked to operate on contested ground.

Boards must lead in environments where consensus is rare and stakes are high. Governance today requires intellectual flexibility, ethical conviction, and strategic vision. Whether navigating the politics of net-zero pledges or safeguarding against foreign takeover risks in a protectionist climate, boards must embrace complexity rather than retreat from it. A curious, values-driven, and adaptable board culture does not avoid the hard questions—it invites them. This is governance, not as administration, but as adaptive leadership.

8. Practical Implications for Boards: Creativity, Complexity, and Change 

The fractured geopolitical landscape demands that boards develop new capacities to manage complexity and ambiguity. As national security reviews, protectionist economic policies, and strategic decoupling reshape the rules of global markets, creativity is no longer a bonus trait—it is a requirement.

Directors must think like system designers, not just risk managers. This means building governance models that can flex with disruption and respond to fast-moving external pressures. Practical steps include bringing geopolitical expertise onto boards, investing in scenario planning, and structuring decision-making processes that accommodate divergent stakeholder expectations.

To support this shift, we have designed The Boardroom Creativity Lab as an immersive space for boards and directors to reframe challenges through creativity, imagination, and collaboration. The Lab empowers governance leaders to design new approaches, prototype adaptive strategies, and cultivate cultures of learning and regeneration. In a world of constant disruption and regulatory flux, creative leadership isn’t a luxury—it’s a necessity.

Closing Reflections: A Generative Story for Governance 

Governance that does not evolve will erode. To remain relevant, it must move beyond structural mechanics and embrace culture, power dynamics, and long-term purpose. The story your board tells—about its role, its value, and its future—shapes the trajectory of the organisation.

So ask again: What story is your board still telling? Is it one of preservation or transformation? Of risk aversion or resilience? Of short-term returns or shared prosperity?

In the emerging blueprint for generative governance, shareholders and boards are not opponents; they are collaborators. Together, they must craft a story rooted in purpose, powered by imagination, and focused on sustainable advancement. This is not just a technical shift, but a cultural awakening. It calls on leaders to engage with governance as a living, evolving force—one that reflects and shapes the kind of world we want to inhabit.