"The more consequential issue for boards and shareholders alike is whether director compensation frameworks are still "fit for purpose" in a governance environment that has grown materially more complex, more adversarial, and more global. If board service has quietly evolved into a role that requires greater time, sharper judgment, and higher reputational risk, then our assumptions about compensation deserve a closer look."
"The workload has expanded dramatically. Boards now oversee cyber and AI risk, geopolitical exposure, regulatory volatility, activist preparedness, executive succession under pressure, and culture as a leading indicator of enterprise risk. Learning curves are shorter. Expectations are higher. Mistakes, especially visible ones, come with greater consequences. The environment has also changed. Outside actors: proxy advisory firms, activists, plaintiffs' lawyers, and social media have made board service more personal."
Board service has shifted from a largely altruistic pursuit to a role carrying significant personal and professional risk. Modern independent directors underwrite risk with three forms of capital: time, judgment, and reputation. The board workload now includes oversight of cyber and AI risk, geopolitical exposure, regulatory volatility, activist preparedness, pressured executive succession, and culture as an enterprise risk indicator. External actors such as proxy advisory firms, activists, plaintiffs' lawyers, and social media have intensified personal scrutiny and reputational vulnerability. Independent directorships are globally competed-for roles that demand operating credibility, risk fluency, and governance under stress, prompting a reassessment of compensation frameworks.
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