2026 Board Focuses: Comp Design, Proxy Roles, Governance, AI and More

As 2026 kicks off, corporate boards of directors face a governance environment defined by rapid change and heightened complexity. Economic volatility, regulatory developments and technological disruption are reshaping the expectations placed on directors. To navigate this evolving landscape, consulting firm WTW identified five priorities that merit focused attention as boards of directors prepare for the year ahead.

1. Reassessing Compensation Design

Global tariffs, regulatory uncertainty and market volatility have introduced new complexities into incentive structures. Boards should review short- and long-term compensation plans to confirm they remain equitable and performance-driven, which impacts both 2025 and 2026 incentive plans. For 2025, discretionary adjustments may be warranted to reflect unforeseen external pressures while maintaining alignment with shareholder interests. For 2026, boards should carefully consider incentive plan design to ensure these plans are designed for resilience, including goal-setting, pay mix, long-term incentive (LTI) vehicle mix, etc.

2. Evolving the Role and Impact of Proxy Advisors

Proxy advisors have announced significant U.S. “say-on-pay” policy changes for 2026. These changes will impact how Institutional Shareholder Services (ISS) and Glass Lewis assess organizations’ executive compensation programs moving forward, including the methodology for assessing pay and performance alignment, a positive perspective on long vesting time-based awards and revised policies related to compensation committee responsiveness and equity plan proposals. These policy changes were quickly followed by an executive order related to the regulation of proxy advisors. The order directs agencies to reassess existing rules and guidance, which means organizations will likely see changes down the road and calls into question the impact level proxy advisors may have in the future.

Notably, it’s been reported JPMorgan’s asset management unit has severed ties with proxy advisory firms in lieu of an internal platform powered by artificial intelligence (AI) to inform U.S. company votes.

While WTW doesn’t anticipate widespread change to corporate executive compensation programs because of this activity, the evolving role of the proxy advisors further reinforces the importance of strong governance practices and a thoughtful and strategically aligned executive compensation program that is both shareholder-aligned and uniquely suited to an organization’s specific circumstances.

3. Addressing Rapid Human Capital Governance Changes

In recent years, compensation committee oversight has thoughtfully advanced to a broader mandate of human capital governance. Leading compensation committees have not only changed their committee names and charters but are now focused on human capital governance, which generally aims to drive value creation by consistently improving the quality, condition and productivity of intangible people assets. The board’s role is to provide strategic direction and people risk oversight and drive management accountability, while management should communicate the return on investment of its people, which often is a business’ biggest cost.

WTW encourages boards to explore the concept of human capital governance in 2026 to assess effectiveness and identify priorities for further exploration with management.

4. Overseeing Artificial Intelligence

AI has moved from an emerging trend to a core strategic consideration. Boards should oversee not only AI deployment within the enterprise but also its ethical, regulatory and cybersecurity implications. Integrating AI governance into risk management frameworks and ensuring accountability at the management level likely will be critical. Additionally, with AI becoming a strategic business imperative, WTW anticipates increased discussion and consideration related to incorporating AI-related metrics into incentive plans.

5. Embracing the Expanding Role of Directors

Conversations with directors in 2026 are rarely limited to executive compensation as geopolitical risk, AI, labor shortages, inflation and more are all major board concerns. With these competing macro-priorities in play, directors are spending meaningful time navigating these complexities and challenging management teams to develop responsive risk mitigation strategies. Boards are increasingly expected to demonstrate adaptability and informed judgment in addressing these emerging risks and opportunities with more compliance-oriented topics getting condensed on board agendas.

This expanded role underscores the importance of continuous learning and proactive engagement on issues shaping corporate reputation and long-term performance.

Thriving and Delivering Value

The year ahead will demand agility, foresight and a commitment to governance excellence. By focusing on these five priorities, boards can position their organizations to thrive amid uncertainty and deliver enduring value to all stakeholders.

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