Private company boards are facing a convergence of pressures—volatile markets, rising stakeholder expectations, and the disruptive force of generative AI (GenAI). The 2025 KPMG Private Company Board Survey captures how directors are responding to these forces and where governance gaps remain.
Boards are entering an era where strategic oversight must evolve from periodic review to continuous engagement. Success will depend on how well directors can challenge assumptions, strengthen scenario planning, and govern emerging technologies such as AI—all while ensuring the company has the resources and discipline to execute.
The survey’s findings reveal a striking truth: even as boards recognize strategy as their greatest opportunity for impact, most are still dissatisfied with how well their organizations identify, plan for, and respond to risk.
The takeaway is clear—2026 will test whether boards can move from being informed observers to proactive architects of resilience and innovation.
Key Findings
1. Strategic planning remains a weak spot
Nearly half of directors said management struggles most with assessing market trends, customer expectations, and competitive dynamics (49%), while another 48% cited scenario planning and risk analysis as major pain points. Other recurring challenges include resource allocation (39%) and defining clear strategic goals (28%).
These results suggest many companies are still reactive—focused on operational continuity rather than strategic foresight. Boards know where the gaps lie: 50% said they add the most value by challenging strategic assumptions, 48% by providing fresh market perspectives, and 46% by helping management identify opportunities and risks.
Interpretation: Strategy discussions are happening, but they’re not deep enough. Directors want to ensure that strategic plans reflect market reality, not internal optimism.
2. Scenario planning is underdeveloped
Only a small share of respondents were satisfied that management’s scenario planning adequately identifies and quantifies risks to the company’s strategy. Roughly half rated their processes as needing improvement across key dimensions: developing plausible scenarios, assigning probabilities, assessing impacts, and ensuring sufficient resourcing.
Boards most often add value by providing input on management’s updates and results (65%) and helping ensure a wide aperture in risk identification (43%).
Interpretation: Boards see scenario planning not as a technical exercise, but as the backbone of strategic agility. Yet most processes remain static, fragmented, or under-resourced.
3. Boards are unprepared for the governance challenges of GenAI
Less than one-third of respondents expressed satisfaction with their board’s understanding of GenAI, its risks, or its strategic implications. Even fewer were confident their companies have governance frameworks for responsible AI deployment.
While most expect significant technology investment over the next three years, few feel equipped to oversee how AI reshapes business models, workforce skills, and competitive positioning. The divide between technological ambition and governance readiness is widening.
Interpretation: Many boards are at the awareness stage with AI—alert to its importance, but unsure how to structure oversight. Directors recognize that they need fluency in AI risk, ethics, and data governance, not just a general appreciation of its potential. Getting smart is essential.
4. Technology investment is becoming central to strategic execution
Fifty-seven percent of companies anticipate needing major technology investments in the next three years to deliver on their strategic plans, and nearly three-quarters plan to fund this internally. Smaller firms are more reliant on outside capital—private equity, credit markets, or strategic investors—while larger ones lean on cash reserves and credit lines.
M&A also remains a lever for growth: one-third of respondents said acquisitions play an opportunistic role in expanding into new markets or capabilities.
Interpretation: The next phase of private company growth will be capital-intensive. Boards must ensure that technology investments and acquisitions are guided by strategy, not by fear of being left behind.
Implications for Boards
1. Rebuild the board’s strategic muscle
Directors must move beyond approving plans to pressure-testing assumptions. The most valuable boards act like thought partners—challenging management’s views on where markets are heading and what customers truly value. This requires directors with diverse experiences, deeper familiarity with the company’s industry, and a willingness to debate.
Boards should demand that management link strategy to measurable outcomes: how each initiative supports long-term value creation, how success will be tracked, and how the company will respond if early indicators show underperformance. Scenario planning must become a standing board agenda item, not an annual offsite discussion.
2. Upgrade scenario planning from exercise to discipline
The survey shows a broad dissatisfaction with how companies conduct scenario analysis. The fix starts with governance. Boards should require management to present not one future, but several plausible ones—with clear probabilities, financial implications, and contingency plans.
Scenario planning should be iterative, updated quarterly, and aligned with key risk indicators. A small, dedicated cross-functional team should own the process to prevent it from being lost amid day-to-day firefighting.
Boards also need to test whether management can pivot under pressure. That means asking practical questions:
· What would trigger a strategy shift?
· What constraints would prevent a rapid response?
· What signals are we monitoring to detect early change?
The goal is to build strategic elasticity—the ability to flex in uncertainty without losing direction.
3. Treat GenAI as a governance priority, not an experiment
The low satisfaction levels around GenAI oversight are a red flag. AI is not just an operational tool; it is a strategic variable that affects competitiveness, ethics, and brand trust.
Boards should insist on three steps:
· Education – Establish a baseline of understanding through briefings or outside advisors so directors can engage meaningfully in AI discussions.
· Governance structure – Define accountability for AI use, risk monitoring, and data ethics. Align this with existing risk and audit committees.
· Talent and oversight – Assess whether the company has the right technical and compliance talent to manage AI systems responsibly.
Boards that delay on AI governance risk reputational and regulatory exposure as standards evolve.
4. Link technology investment to strategic value creation
With more than half of companies expecting large technology outlays, boards must ensure capital allocation reflects strategic priorities. The emphasis should be on enablement, not experimentation.
Boards should ask:
· How will each investment advance the strategy?
· What are the expected returns and timeframes?
· How will we measure adoption, ROI, and risk?
Given tightening credit markets, funding discipline is critical. Directors must verify that management is balancing growth ambitions with capital resilience—particularly for firms dependent on private equity or non-bank lenders.
5. Strengthen board composition and processes
Underlying every theme in the survey is capability. Effective oversight requires directors with up-to-date expertise in digital strategy, data governance, and risk management. Boards should consider:
· Rotating in directors with technology or industry depth.
· Conducting board effectiveness assessments focused on strategic oversight.
· Embedding continuous learning into board routines.
Equally important is culture. Boards that foster open dialogue with management—and among directors—are better positioned to see around corners.
The Road Ahead
The 2025 KPMG survey paints a picture of private company boards in transition: aware of what needs to change, but not yet consistent in execution. Directors know that oversight must evolve from backward-looking review to forward-looking anticipation.
The next few years will test whether boards can translate awareness into action. That means:
· Recasting board agendas around dynamic strategy.
· Demanding evidence-based scenario planning.
· Exercising ethical stewardship of AI.
· Ensuring capital discipline and alignment.
In short, boards must become engines of strategic resilience.
The companies that thrive will be those whose boards stop treating uncertainty as a threat and start treating it as the job description.
About Timothy G. Glowa
Timothy G. Glowa is a Non-Executive Director and board advisor specializing in human capital strategy, workforce transformation, and board governance. He helps organizations address critical HR challenges such as talent attraction, retention, rewards, and culture. Tim also guides boards and executives in understanding and governing artificial intelligence—ensuring responsible adoption, oversight, and value creation. Drawing on his experience as a former Managing Director at EY and Partner at Grant Thornton, he brings a balance of strategic insight and practical execution. Tim is available for consulting, training, workshops, and will consider select board appointments.