A 2026 Lens on Board Effectiveness

Boards today face unprecedented complexity. Regulatory expectations continue to rise, customer behaviour is shifting, digital transformation is accelerating, and organisations are operating in an environment of ongoing economic and geopolitical uncertainty. Against this backdrop, effective governance has never mattered more.

Board effectiveness reviews, whether internal or external, give boards the opportunity to step back, assess how they are operating, and strengthen their collective performance. Internal reviews offer flexibility and cost-efficiency, but they can also struggle to challenge entrenched norms and uncover blind spots. External reviews bring independent insight, a stronger benchmark against best practice, and deeper challenge, which is one reason the UK Corporate Governance Code recommends an externally facilitated review at least every three years.

Across our work with financial services boards, several themes consistently emerge. These align closely with findings from leading governance research bodies, and together they highlight where boards will need to focus their attention as we move further into 2026.

Below are the five most common board effectiveness challenges we see and what the research says about them.

1. Board Packs and Information Quality

High-quality information is one of the strongest predictors of board effectiveness, yet it remains a persistent challenge. Many boards receive packs that are:

• Too long and overly descriptive, making it hard to identify key issues
• Delivered too close to the meeting, limiting preparation time
• Inconsistent in quality, especially where there are multiple authors
• Focused on reporting rather than strategic insight

This pattern is widely recognised in research. The Board Intelligence Board Effectiveness Report 2025 highlights information overload, late papers and unclear papers as the top barriers to effective decision-making. 

Boards that improve the quality and clarity of information create the foundations for stronger discussions and better governance.

2. Board Composition, Renewal and Succession Planning

Many boards recognise that their composition is not fully aligned to the organisation’s current and future needs. Common issues include:

• Long-serving directors without regular refresh 
• Gaps in digital, data, cyber, or ESG expertise
• Limited diversity of background, experience or lived perspective
• Weak or unclear succession plans or future capability requirements

These findings echo the Spencer Stuart UK Board Index 2024, which reports slow board refreshment, continued gaps in emerging skill areas, and the need for more intentional succession planning to build future-ready boards.

Boards that invest in renewal and alignment aligned with the strategy will be better equipped for the challenges ahead.

3. Strategic vs Operational Focus

One of the most common findings in board reviews is that boards drift into operational detail. While it often comes from a place of diligence, it can lead to:

• Crowded agendas
• Limited time for long-term strategic thinking
• Discussions lost in specifics rather than outcomes
• Blurred boundaries between oversight and management

This challenge is widely recognised. The KPMG On the 2025 board agenda report notes that boards continue to spend disproportionate time on backward-looking reporting rather than forward-looking strategy and value creation. 

Boards that maintain a clear strategic focus add far greater value and ensure the executive has the space and clarity needed to lead effectively.

4. Risk Oversight and Future-Focused Governance

Boards are navigating rapidly evolving risk landscapes: AI, cyber, ESG, conduct, consumer vulnerability and geopolitical uncertainty. Yet many still assess risk issue by issue, rather than synthesising it strategically.

The Aon Global Risk Management Survey 2025 highlights the increasing convergence of risks and the need for organisations, including boards, to shift toward more integrated, forward-looking risk thinking. The report emphasises that resilience relies on connecting emerging risks to broader organisational strategy rather than treating them in isolation.

Boards that take a more forward-looking approach to risk strengthen organisational resilience and make more informed long-term decisions.

5. Board Dynamics, Relationships and Constructive Challenge

Even with strong governance processes, board effectiveness ultimately hinges on relationships and behaviours. We see recurring patterns:

• Limited constructive challenge
• Over-reliance on a few dominant voices
• Newer members hesitant to contribute  
• Boards avoiding difficult conversations
• Tension or over-harmony limiting real debate

The PwC Annual Directors’ Survey 2024 reinforces these observations, highlighting concerns about underperforming directors, ineffective challenge, and the need for stronger psychological safety to support open, high-quality discussion.

Boards that cultivate strong dynamics and constructive challenge benefit from richer debate, reduced blind spots and more effective oversight.

Effective Boards

Whether a review is internal or externally facilitated, the most effective boards share a few common practices:

• They create space for open, honest reflection about behaviours and processes.
• They balance assurance with strategic foresight, ensuring their time adds value.
• They invest in information quality, director development and ongoing renewal.
• They prioritise psychological safety, enabling all voices to contribute.
• They treat their board review not as a compliance exercise but as an opportunity for growth.

Boards that embrace these principles are the ones best positioned to navigate complexity and to lead their organisations confidently into the future.

In the next article, I’ll share practical, evidence-informed steps boards can take to address these challenges from strengthening board dynamics to improving risk oversight and rebalancing strategic time.

Look out for Part Two: Strengthening Board Effectiveness in 2026, coming out next week.

If you’d like to talk through how we can support your firm with an external board effectiveness review, contact me directly and let’s set up time for a call.