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How can boards strategise for the decade ahead when it’s hard to predict how even the next few months will pan out? Three experts reveal what directors can do right now to be fully prepared and future-proof.
Global shocks: Luke Yeaman, Chief Economist and Head of Global Economics & Markets Research, CommBank; former deputy secretary, federal Department of Treasury
We’ve entered a new economic era, says Luke Yeaman, who points to four key drivers — geopolitics, net zero, technology and demographics.
“The combination of those is what matters most for boards, business investors and decision-makers,” he says. “The biggest issue driving change today — and over the next decade — is a breakdown in trust in the global economy. We have the two largest economies in the world, the US and China, in open strategic competition. That is driving a reversal of globalisation and driving more regulation into the system, with a bigger focus on economic security over economic efficiency.”
Yeaman says resilience will remain a key theme over the next decade. “We are going to have more volatility, more shocks and more threats, both financial and operational. Directors will need a heavy focus on resilience and in hedging tools and insurance to manage this more volatile landscape.”
The other core shift is more active involvement by the government in industries. “You will see an increasing blurring of lines between government and the private sector,” he says, noting directors need to be equipped to navigate that change and to shape the regulatory landscape well.
“Businesses do that today, but there will be an increasing focus on that in the future.”
Being nimble in the face of fast-evolving technologies is critical, he says. “Those businesses at the forefront of adopting technology quickly and flowing it through their businesses in a tangible way will be more successful in dealing with volatility, more adaptable to the different shocks and changes in industry structures over the next decade.”
And don’t expect any respite from the escalating uncertainty. “There’ll be more one-off shocks and a more rapid pace of change, and we will see more disintermediation of industries,” he says. “If boardrooms are flat-footed, they will fall behind. If they are adapting quickly, keeping a close watch on those evolving technologies and helping to shape and guide the regulatory environment that will manage those transitions, they will be more likely to be successful.”
Yeaman also highlights a “big investment cycle coming”, driven by increased expenditure in defence, AI and the net zero transition. This combination will mean “more investment, more capital expenditure coming into the system and ultimately, more competition for funds, for capital and higher interest rates”. This more competitive landscape for funding will accelerate, particularly during the next three to five years.
“Over the next decade, to achieve the 2035 emissions-reduction targets the government has set, you have to start decarbonising all aspects of the economy, heavy industry, heavy transport, aviation, agriculture and the built environment. I don’t think boards and management teams have really come to terms with the fact that these changes are coming and that the size of the transformation across the whole economy will start to touch many more sectors.”
Yeaman believes “the relationship between the US and China will continue to become more complicated and more tense” and Australia will be caught in the middle. “The risk of conflict can’t be ruled out... and in terms of shocks, that relationship is certainly the one to watch very closely.”
Despite that tension, Yeaman expects progress on decarbonisation to deliver multiple benefits for Australia once challenges around energy grid capacity are overcome.
“By 2036, we will be seeing some of the benefits that flow from adopting transformative new technology spreading into a substantial uplift in productivity across many sectors of the economy as we decarbonise. That’s the big upside for this new economic era, which has many negatives, particularly around geopolitics.”
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Reframing climate: Taylor Dee Hawkins GAICD, Co-founder and managing director, Foundations for Tomorrow; advisory board member, WEF Global Foresight Network
As most boards know all too well, the energy transition imperative has reframed the climate crisis as a strategic must-do. “At the moment, we view climate as an ESG subset, but it’s going to be a core financial and strategic risk that will shape capital flows,” says Hawkins.
Over the next decade, she says climate action will be “closely tied to the existential future of any organisation and the way directors relate to it will be fundamentally different”. Looking ahead, Hawkins flags the emergence of “transition capitalism” and predicts “climate responsiveness will become a key trading point for building market trust”. She believes board literacy around climate risks will need to improve dramatically, “because their ability to respond to live issues on that front will continue to escalate”.
Hawkins forecasts that the ongoing impacts of climate change — including how companies manage their net zero initiatives and respond to emergencies — will require the role of boards to further evolve.
“I expect the landscape will demand us to move from what could be characterised as a passive oversight function to more strategic stewardship, resilience-building, transition and guidance. It needs to be more of a front-footed role because of how volatile things are becoming.”
This requires directors to elevate their skills for “horizon scanning” and “building more foresight practice into the way boards function” to understand the many potential futures facing an organisation. Hawkins envisages the emergence of a “climate solvency score”, which would tie climate readiness and responsiveness directly to its financial concept of solvency.
“If a large organisation hasn’t embraced proactive strategies for addressing climate, it’s a financial risk and I’d be amazed if investor confidence and market trust is supporting them,” she says. “I’d expect their insurance premiums will go through the roof and they’ll find it harder to borrow money because they’re not responding to these emergent risks.”
She also notes that inadequate climate strategies make talent attraction and retention much harder — particularly among purpose-driven generations — as well as leaving companies exposed to future climate litigation.
Hawkins urges boards to embrace intergenerational governance. “Having people outside of your own generation is a natural antidote to short-termism.”
The presence of younger people on a board should open broader conversations about the long-term implications of decisions, including for people who are not — and will never be — in the room. “Putting aside the moral argument, purely from an economic perspective and the legacy of your leadership, you need to embrace this intergenerational thinking or the market will respond.”
Despite the decades of work by scientists to warn about climate risks, it’s an area where many find themselves out of their depth, so it requires a fundamental culture shift. “Even with all the projections in the world, we don’t fully understand all the risks we face with climate change,” says Hawkins. “Directors need to build the skills and willingness to talk about things they don’t fundamentally understand. By the time we get to 2036, if you look at the climate projections, it will be a very drastic situation and you need the capabilities, reputation, trust and talent already in place. You don’t want to wait. Companies that invest in that foundation will reap the rewards.”
The AI train: Dr Jon Whittle, Former director, CSIRO Data61; author, AI for Business; advisory panel member, Sovereign Australia AI
“Ten years from now, AI will be considered by boards in the same way as cybersecurity is very much embedded into board practice today,” says Whittle. “Boards will have become a lot more mature around AI and will have systematic risk management processes in place.”
This shift will be supported by a new suite of sophisticated tools specifically designed for board work. “Among them will be strategic foresighting tools to support the role of the board thinking about external factors and the forward strategy,” says Whittle. These emerging AI tools are capable of accessing and crunching data in real time “in a way that even a board collective can’t do” to help their understanding of key megatrends. Whittle says other tools will likely include sophisticated reputation scanners, such as AI continually monitoring social media for mentions of the company.
The environmental impact of AI will increasingly become a governance concern, under the umbrella of responsible AI. “It’s quite a nuanced issue — it’s not as simple as saying AI is all terrible for the environment,” he says, adding some studies show generating a GenAI document may use lower overall aggregate energy than writing one from scratch. He adds that innovations in AI data centre construction — including around cooling and energy efficiency, and increased use of renewable energy — will bring improvements. “That said, boards will need to have greater awareness of the environmental impact of their AI use and will need to account for it.”
He is sceptical of “crazy predictions” around productivity gains from AI, noting the challenge is in translating individual task gains into productivity increases at an organisational level. “Simple aggregation ignores the fact that organisations are complex beasts,” says Whittle. “Just because every worker is saving two hours a week doesn’t mean you can say, ‘Across our 1000 workers, we are now saving 2000 hours.’ What will likely happen is there will be more noise, more work, more pointless meetings to fill the two hours.”
Whittle says AI can unlock productivity increases, but it “requires a fundamental rethinking of business models and processes” to move the needle. “Not many businesses are doing it yet and while I hope it will happen in 10 years, I suspect it will be a lot slower than the predictions. If you look at the introduction of IT systems in the 1980s, it took a lot longer to get those organisational productivity benefits than people expected.”
By 2036, he says, boards may be able to lean on “a digital twin of the whole organisation for scenario planning”. He believes it’s feasible “with a lot of serious data plumbing work” to bring siloed data together to mirror every aspect of an organisation. If they could create an AI-driven digital twin, boards could use it to play through the outcomes from different scenarios to help them make better decisions.
Will boards be 100 per cent human? Whittle doesn’t predict “actual AI directors” to be widespread a decade from now, but AI will definitely play a part. There are already AI tools acting as 24/7 leadership coaches.
“We’ll probably see AI coaches specifically developed for directors,” he says. “It might help you manage the interpersonal dynamics and position yourself as a trusted person on the board. If it’s trained up with legislation and compliance requirements, you can interact with the AI on particular issues to make sure you’re not making decisions that might have adverse effects down the road.”
Will we reach a point where the AI gets a board vote? “We might well have AI systems that are proxy directors with access to the board papers and additional information, that are listening to all the conversations in the board meeting and can provide advice when called upon. There are a lot of cultural barriers to this taking place, but I can imagine a board could get value by asking the AI, ‘We’ve discussed this, are there key issues we’re not thinking about and how would you suggest we navigate that?’ That’s more realistic than the likelihood of having actual AI directors by 2036.”
This article first appeared as 'DATELINE: 2036' in the February/March 2026 Issue of Company Director Magazine.
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