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Boards & Governance

Transitioning the board from custodian to steward

Corporate responsibilities are shifting as society increasingly expects businesses to address global challenges, from social justice to climate change. Boards must adapt to this evolving landscape by transitioning from custodianship to stewardship. This article was first published in the Q1 2025 issue of the SID Directors Bulletin, published by the Singapore Institute of Directors.

by Tonny Loh

In recent years, corporates have faced mounting pressure to address pressing social and political challenges. Labor disputes, social justice movements, geopolitical tensions, and the lingering impact of Covid-19 have reshaped expectations of businesses.

Environmental, social and governance (ESG) issues show no sign of letting up. Climate risk and technological advancements continue to transform the business landscape. Meanwhile, geopolitical conflicts such as the Russia-Ukraine war, Gaza hostilities, and rising US-China tensions contribute to economic strain and surging cost of living.

Evolving expectations of boards

The board’s remit is expanding and diversifying. Stakeholders are calling for increased accountability from business leaders. Some countries have set regulations around the liability of senior leaders (including boards), and investors are demanding more transparency. 

In uncertain and unpredictable times, the board’s ability to constantly adapt will be key. Today, the board must operate with agility and a long-term perspective – adapting to rapid twists and turns in global competition, talent trends and technology shifts.

The transition from custodian to steward requires boards to lead in four key areas: sustainability, DEI (diversity, equity, and inclusion), culture and succession planning.

Leading for the future

In these uncertain and unpredictable times, the board’s ability to pivot quickly and constantly adapt to meet ever-evolving challenges, competition, talent needs and technologies will be key to organizational success. The board must be willing to innovate, expand its capabilities and become comfortable with uncertainty and ambiguity. In other words, boards must function with agility, resilience and a long-term outlook.

To read the full article, download the PDF 

About the Author
Tonny Loh
Tonny Loh is a partner in Heidrick & Struggles’ Singapore office and a member of Heidrick Consulting.