Each year, the Institute of Directors New Zealand releases its Top 5 Issues for Directors, offering a useful lens into what boards should be paying attention to in the year ahead.
For 2026, the themes reflect a world that feels more complex, more interconnected, and in many ways more demanding of directors than ever before. But complexity doesn’t have to mean overwhelm. At Grounded, we see the issues not as a reason to panic, but as prompts for better conversations, clearer thinking, and more intentional governance.
1. Governing for Growth in a Low-Productivity Economy
New Zealand’s business landscape is unique. Nearly 97% of our businesses employ fewer than 20 people, and many stay small for their entire lifecycle.
At Grounded, we don’t see smallness as a failure (or inability to grow). In fact, for many organisations, it’s a deliberate and strategic choice. Staying small can protect quality, speed up innovation, reduce overheads, and strengthen relationships with customers and communities. We’re a small business ourselves – and proud of it!
The governance challenge comes when boards default to growth as the only marker of success. Directors will need to ask more nuanced questions: “What does ‘growth’ really mean for us? Is it scale, resilience, impact, profitability, sustainability – or a mix?”
Good governance in a low-productivity economy isn’t about chasing size. It’s about governing for the right kind of growth, aligned to purpose and context. Matching discipline with ambition essential.
2. The Impact of Geopolitical Climate on Strategy and Risk
It’s hard to turn on the news without the relentless feeling of the weight of global uncertainty.
For Kiwi boards, it can be tempting to assume that international politics sit well outside the boardroom. But in reality, global events are increasingly shaping local outcomes – from market access and supply chains to workforce availability and consumer confidence.
Even organisations with no obvious international exposure should be asking: “What happens if conditions shift suddenly here in New Zealand? How resilient are we to disruption?”
Governance today requires broader scanning, scenario thinking, and a willingness to engage with uncertainty. You don’t have to predict the future but you need to understand the risks to try to be prepared for it.
3. AI as an Agent of Change and the Governance of automated Decision-Making
Artificial Intelligence (AI) isn’t new. We’ve been using it for years – Your Spotify or Apple recommended playlists, Google search results, targeted advertising and plenty more. Until recently, AI was mostly hidden away as a supportive tool rather than front and centre.
The line between Tool and Decision-Maker is now blurring. AI agents are increasingly performing analysis, prioritising options, drafting responses and influencing decisions that were once firmly human-led.
For directors, this raises a critical governance question: “Just because we can automate something, should we?”
AI can be powerful – but it doesn’t replace judgement, context, values or the accountability of the Board for decisions made by AI. Boards will need to actively govern how AI is used, where human oversight is essential, and how ethical considerations are embedded into decision-making, ensuring robust assurance processes are in place to verify decisions made
Being technologically curious is important. But so is remembering how vital being human remains – in the boardroom and beyond.
4. The Chair-CEO Dynamic and Board Effectiveness
Should this really be an issue for 2026? In our view, this has always been one of the most critical – and most fragile – aspects of good governance.
We’ve been working with board for years on the Chair-CEO relationship, and the pattern is consistent: when it’s healthy, boards function well. When it’s strained or unclear, everything else feels harder.
This dynamic isn’t about friendship or hierarchy. It’s about trust, role clarity, open communication and mutual respect and challenge And while it’s never “finished”, now is as good a time as any to strengthen the Chair-CEO relationship – especially as complexity increases and expectations rise.
5. Committees, Advisory Boards, and What “Good Design” Looks Like
Committees and advisory board issues aren’t new either – and yet the question “Is this working?” never seems to go away.
The IoD’s focus on governance design is timely. But when boards ask us what good design looks like, well, it depends.
Every organisation is different. Purpose, size, maturity, risk profile and capability all matter and need careful consideration. A structure that works brilliantly for one board may hinder another.
Good governance design isn’t about copying templates. It’s about being intentional and clear on why a committee or advisory board exists, what authority it holds, how it adds value, and when it may no longer be fit for purpose.
Final Thoughts
None of the top 2026 issues are entirely new. What is new is the pace at which they’re converging together with the increasing complexity of the environments we work in. For boards, the challenge (and opportunity) is to respond with clarity, curiosity and courage.
At Grounded Governance, these are exactly the conversations we’re having with boards every day. It’s reassuring to see that our work remains aligned with the real challenges directors are facing. So, we’ll leave you with a reminder – Good Governance isn’t about having all the answers, but about asking better questions, together.
If your board would value support navigating any of these issues, please get in touch.