Thought Leadership

A quick look at 2025’s corporate governance trends reveals a growing concern that businesses can no longer afford to ignore: geopolitics is now a material corporate risk. What once belonged in the domain of diplomats and policymakers has moved squarely into boardrooms. From the recent war between Pakistan and India, to the war in Ukraine and Palestine, and trade tensions between China and the West, global political volatility is affecting everything from shipping costs to supply chains and investor confidence.

The conversation around AI often amazes us with futuristic possibilities, but what is less dazzling is the environmental bill that comes with every interaction. AI is, in effect, a resource intensive exercise: data centers need water to cool servers, electricity to keep them running, and minerals to manufacture the underlying hardware. If AI is the brainchild of our century, then its environmental footprint is the messy home that nobody wants to clean up.

The Securities and Exchange Commission of Pakistan (SECP) has taken a decisive step to modernize corporate governance in listed companies by amending the Code of Corporate Governance Regulations, 2019 and Postal Ballot Regulations, 2018. These reforms address longstanding issues in our corporate landscape, aiming to enhance transparency, accountability, and shareholder empowerment.

Cybersecurity is no longer confined to the realm of IT departments—it has become a pressing strategic issue that demands direct and sustained attention at the highest levels of corporate governance. Recent political developments, both within Pakistan and globally, underscore the urgent need for boardrooms to enhance their approach to digital risk.

Over the past months when we have engaged with corporate leaders in Pakistan on bringing ESG on to their board and business agenda, we are confronted with many forms of pushback and one of the most frequent pushbacks we get is ‘it’s not our problem’ or that ‘we didn’t create this problem so why should we solve it.”

The benefits of appointing Independent Directors have been debated globally and are very well established. Ironically, family businesses who most strongly oppose the addition of such directors may, in fact, be the biggest beneficiaries due to the facility of fulfilling the skill gap on the Board and catering to the issue of succession that arises in the 2nd and 3rd generation when most businesses start falling apart.

A significant number of Board members are still questioning the buzz around the integration of Environment, Social and Governance (ESG) considerations into core business practices and reporting, writing it off as a current market trend with the assumption that it will soon be passe and disappear as fast as it appeared. Highly unlikely.

A little thing called Chat GPT was released to the public on November 30, 2022. At first glance, it hardly seemed distinguishable from one of the many chatbots or search engines. Only when one typed a query into it, and witnessed the answer, that it dawned that it was, indeed, the beginning of a new era.

When boards and leadership sit down to make long term strategies and plans, they must put these through stress tests against the rising risks and opportunities that are forming part of the global business ecosystem, particularly those related to environment and social equity.