Company directors are confronted with an increasingly difficult operating environment shaped by rising costs, economic uncertainty and rapid technological change.
New research from the Australian Institute of Company Directors shows many boards are approaching the future cautiously, with growing concern about productivity, inflation, workforce disruption and global instability.
For many directors, productivity has become the defining economic challenge. Business leaders are increasingly worried that weak productivity growth is limiting competitiveness, slowing investment and placing pressure on long-term economic performance.
At the same time, operating costs continue to rise. Many directors expect higher expenses across supply chains, energy, transport and labour, creating additional pressure on organisations already managing tight margins and economic uncertainty.
Global instability is also weighing heavily on business confidence. Directors report concerns about trade disruption, supply chain reliability and broader economic volatility affecting investment decisions and strategic planning.
Artificial intelligence is emerging as both an opportunity and a risk.
Most directors say AI tools are already improving productivity inside their organisations, and many expect adoption to accelerate. Businesses are increasingly using AI to streamline operations, automate routine tasks and improve decision-making.
But the pace of change is creating new challenges for boards.
Many directors believe organisations are struggling to keep up with the speed of technological change, particularly in areas such as cyber security, data protection and governance. Concerns about the misuse of AI and growing exposure to cyber threats are becoming central boardroom issues.
The workforce implications of AI also remain uncertain. Some directors expect automation and AI-driven systems to reshape staffing needs in sectors where administrative and information-based work can be more easily automated. Others believe workforce impacts will be more gradual.
Despite these shifts, flexible work arrangements continue to remain firmly embedded across many organisations. Hybrid and remote work models are now widely viewed as a standard part of workforce management rather than a temporary adjustment.
Directors are also increasingly focused on regulation and compliance burdens. Many believe excessive regulation is slowing productivity growth and making it harder for organisations to respond quickly to economic change.
Calls for reform are particularly strong around planning systems, industrial relations and broader regulatory processes that businesses say add complexity and reduce efficiency.
At the centre of these concerns is a broader question about resilience.
Boards are being asked to manage rising financial pressure, rapid technological disruption and growing geopolitical uncertainty all at once. For many leaders, the challenge is no longer responding to a single crisis, but operating in an environment where uncertainty has become constant.
The findings reflect a business sector trying to balance caution with adaptation. While organisations continue to invest in technology and new ways of working, directors remain focused on managing risk, protecting productivity and maintaining stability in a volatile environment.
Read also: 430+ NFP directors get free access to ‘life-changing’ governance training
Ritchelle is Content Team Manager at Akolade, producing stories for Australia's not-for-profit sector at Third Sector.
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