Corporate boards have always been responsible for managing the strategic direction of the company and protecting shareholder interests, but as risks have changed, so have expectations. In recent years, board responsibilities have evolved. Have your corporate governance practices kept up?
Hands-On Cyber and Tech Governance
Technology issues are no longer the sole domain of IT departments. Technological advancements have brought both opportunities and risks that can impact bottom lines. As a result, corporate boards are increasingly expected to take a hands-on approach to technology governance.
Two issues have emerged as particularly important:
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Cybersecurity. Cyberattacks can be devastating for a company, resulting in immediate disruption of key business operations, regulatory costs, tarnished relationships with partners, and reputational damage. Cyberattacks can also negatively affect share value, and boards may be accused of overstating their security measures, downplaying their cyber exposures or being negligent in their cybersecurity. In 2025, the D&O Diary reported that two companies were facing cybersecurity-related securities class action lawsuits.
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AI Adoption. Existing companies are adopting new AI tools while new startups are attracting investors with impressive AI capabilities. There’s a lot of money in the AI boom, and that means there’s also a lot of risk. Boards could be accused of failing to disclose the risks associated with AI. Other allegations involve AI washing, or overstating a company’s AI capabilities. The SEC has charged investment advisors with AI washing, while the FTC has sued an AI company for similar reasons. While some cases of AI washing may be intentional misstatements designed to attract investors, boards with limited understanding of technology may inadvertently overstate their capabilities.
Geopolitical Conflicts and Trade Wars
Rapidly changing tariff policies and geopolitical conflicts are also triggering new and increased D&O risks for boards.
According to the Allianz Commercial’s Directors and Officers Insurance Insights 2026, armed conflicts have been escalating around the world, resulting in economic instability and making international trade and investments riskier. Companies that fail to anticipate and adapt to geopolitical-related risks may face financial loss, and corporate leaders may be held accountable for misjudging the impact of geopolitical developments or failing to control risks and adapt.
With the outbreak of the Iran war, geopolitical risks are increasing. According to NPR, approximately one-fifth of the world’s oil supply normally transits the Strait of Hormuz, where vessels have been under attack.
Shifting Regulations
Trump’s second term has prompted significant policy changes, some of which have direct impacts of board responsibilities and risks.
According to Carrier Management, new policies give boards greater power. For example, boards now have more authority to block shareholder resolutions and stop efforts to limit emissions or report workforce diversity details. The SEC has also proposed disclosure reform, according to D&O Diary.
While these regulatory changes are largely favorable to boards, they also require directors to consider how their responsibilities are changing and what the impact on investor relationships and company reputation could be.
Meeting Increased Board Responsibilities
According to The Conference Board, CEO turnover is increasing, and boards are taking a more proactive approach to leadership decisions.
The current business environment is filled with both opportunities and risk, and boards are expected to play a hands-on role in leading the company to prosperity. This is a good time to examine governance, disclosure and leadership issues.
It’s also a good time to assess your D&O insurance and whether it’s meeting your needs. Contact the NSI Capital Markets Group for a review.
Our services include:
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Comprehensive Risk Analysis: Assess the issuer’s insurance portfolio (e.g., D&O, Cyber, General Liability, Workers’ Comp) for adequacy, identifying gaps, overlaps, and underinsured risks.
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Risk Exposure Evaluation: Analyze operational, financial, regulatory, executive, cyber, and reputational risks, leveraging corporate filings (10-Ks, 10-Qs, MD&As), loss history, and stakeholder interviews.
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Integration with Due Diligence: Participate as a key member of the client’s SEC counsel-led due diligence team, with full access to the data room to ensure coordinated analysis.
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Management Presentation: Prior to finalizing and releasing Report, present findings and related information to management team.
