The role of board search firms in a rising risk environment

While progress on diversity, particularly with regard to gender has been real, AICD chair Naomi Edwards said a “noticeable counter force” was emerging – a flight to safety.

“We’re operating in a world of persistent disruption,” said Edwards. Geopolitical tension, economic uncertainty, regulatory complexity and rapid technological change, particularly with AI, are now part of the everyday context for boards. In that environment, many boards feel a strong pull towards appointing people who’ve seen it all before – seasoned CEOs, industry veterans and experienced hands.”

That instinct isn’t wrong, she said, noting that experience matters deeply, especially when the external environment feels unpredictable. 

Widen the vision

“But there is a real risk that, in seeking certainty, boards narrow their field of vision at exactly the moment they need it to be widest,” said Edwards.

While boards need directors who understand complexity and can exercise judgement under pressure, when viewed across the system, that focus can unintentionally reinforce a lack of diversity.

“There’s a far broader acceptance today that boards perform better when there is genuine diversity of thinking, background and experience,” she said.

Even in turbulent periods, there should always be room at the table for someone who brings a fresh perspective, different skills or a way of seeing emerging risks earlier than others.

“If the pipeline of CEOs and senior industry leaders is itself narrow, and the evidence tells us it is, then relying too heavily on that pathway inevitably limits who ends up on boards,” said Edwards.

The AICD is increasingly focused on succession as a board-level issue, not simply an appointment decision. While selecting a capable individual matters, constructing an effective board is about balance across the whole group, including capabilities, tenure, cognitive diversity and future readiness.

A fresh framework

Gorman said the core values of democracy in Australia are at the heart of a well-run board.

This includes that decisions are better when we have a range of views expressed before the decision is made and we believe in the wisdom of collective scrutiny and collective decision making, he said.

A 2025 review of the appointments system by former Australian Public Service Commissioner Lynelle Briggs AO GAICD found processes in place were inconsistent, there was a heavy reliance on direct ministerial appointments and a lack of consideration for proper appointment processes also meant a failure, often, to consider people from diverse backgrounds, he said.

“Talent pools were often narrow, recycled and unrepresentative of Australia.” 

As Minister for the Public Service, Senator Katy Gallagher led the creation of the Australian Government Appointments Framework, which delivers structured decision making, broad and diverse candidate fields, and sufficient support for ministers to make the best possible appointment, he said. 

The Australian Government Appointments Framework applies to over 2000 appointed positions across the Commonwealth including secretaries, agency heads and board appointments.

Strong boards are built through “capability, diversity and renewal”, said Gorman, adding the framework is better suited to modern public offices, including boards with complex governance and capability requirements.

“Not every director will find themselves on a government board. But all directors have a role to play in the policy cycle.” 

The government wants to support the private sector to grow and work together in partnership.

Driving a deliberate conversation

“If you think about governance in Australia as a system, there are many different parts shaping outcomes – boards, institutions like the AICD and search firms,” said Rigotti.

“Each plays a different role, but all influence who ends up around the board table and how well boards function. What’s been missing, at least in our view, is a more regular and deliberate conversation between some of those parts.” 

Edwards said search firms sit at a unique intersection of the governance ecosystem.

“Search firms see the talent coming through. You hear chairs’ anxieties before they’re ever written down. You observe shifts in skills, expectations and confidence long before they show up in data.” 

The AICD sees its role as helping directors prepare for the future through education, research and leadership across the governance ecosystem. 

“But we also know we don’t do that alone,” said Rigotti.

Building partnerships “where search firms are engaged as strategic advisers rather than transactional search providers, is something we strongly support”, said Edwards.

The AICD wants to work more closely with search firms to develop ways of delivering more diverse and better equipped directors for future board roles in the APS, private, public and NFP sectors.