Back to Global Corporate Governance Trends for 2026
The weakening consensus on North American free trade and commerce in 2025 has prompted Canadian businesses to adopt a broader strategic lens, with increased focus on markets like the UK, Europe, and Asia Pacific. While the US will continue to play a central role in Canada’s economic and trade policy, future growth strategies are placing greater emphasis on diversifying into foreign markets aligned with the federal government’s "Build Canada Strong" commitment.
This shift has ignited proactive conversations about the need for future directors who are experienced in new market entry or have a network and understanding of a particular region. This is particularly true as Canadian companies adapt to the country’s new commitment to infrastructure and defense spending, initiating or deepening trade arrangements with non-US countries, as well as an energy policy that is aggressively promoting exports to foreign markets. The expectation is that such directors will help de-risk companies from pursuing business strategies that are becoming less relevant in a rapidly changing political-economic environment.
Companies and society are adapting to unrelenting disruption that has reshaped consumer behavior, investment theses, institutional structures, and regulatory regimes – often upending longstanding business models. Viewed as the most disruptive force in decades, generative AI is triggering a rethink of business strategy, organizational design and culture, capital allocation, and stakeholder management. In turn, boards are playing a more important role in assessing the relevancy of emerging technological opportunities and risks and will be increasingly called upon to offer penetrating insights and constructive challenge.
As Canadian boards grapple with accelerating their understanding of AI’s business implications, the pressure to transform also accelerates. Accordingly, boards are attaching a premium to new directors who bring experience that will support and challenge management in building agile, resilient, and sustainably profitable businesses.
Boards also remain on high alert relative to cyber-risk. In recent years, some boards experimented with appointing directors with cyber expertise. The vast majority have prioritized active or recent executives that sit in enterprise-wide roles at companies recognized for effectively managing cyber risk. Another challenge is the limited supply of technology and transformation-tested executives with experience operating at scale, forcing Canadian companies to compete more aggressively for US talent.
At the same time, institutional investors and CEOs are placing greater emphasis on having at least one or two experienced directors (beyond the current CEO) on the board. The demand is driven by two factors: First, a former enterprise leader who has “walked in the shoes” of the CEO brings a more developed systems mindset and balanced judgment to board deliberations and decision-making. This is particularly important in a world where planning cycles have been dramatically compressed due to constant change. For recently appointed CEOs, having a mentor on the board helps to accelerate and de-risk the new leader’s transition.
Second, competency matrices – when interpreted narrowly – can reinforce a preference for highly specialized directors drawn from defined fields. This “designated hitter” approach to structuring a board is increasingly becoming outdated. Many boards are now optimizing for a better balance, with some “generalist” directors who help elevate integrative thinking. Under pressure from shareholders and regulators to shrink the size and improve the accountability of boards, it is increasingly difficult to square this demand without having each director solve for a wider breadth of experience and expertise.
While certain countervailing legal, political, and market forces have reduced the focus on DEI and other ESG-related matters, boards continue to emphasize diversity to satisfy or maintain earlier commitments. This tension is evident in board appointment data: although women now hold a record 30.5% of the board seats on all TSX-listed companies, there has been an 8.5% decline in the rate at which women are being appointed to fill new or vacant director positions in the last year. Even so, companies continue to consider gender, race and ethnicity, and other forms of diversity in their formal selection processes. Over the past two years, boards—especially those of large-cap companies—are increasingly seeking Indigenous representation as well. Part of this focus is in response to the nation’s economic reconciliation commitments.
Regardless of company size and industry, most boards are driving their organizations to be more proactive, systematic, and rigorous on CEO and C-suite succession. Investors are increasingly requiring more transparency to be confident that management teams are building capability and mitigating future risk. In some cases, investors are expressing concern about the perceived lack of executive assessment and development planning, and are more vocal when a succession process ends in failure or a sub-optimal outcome.
Large cap and heavily regulated companies have traditionally been the most advanced in their approach to succession planning. Heightened awareness of the benefits of a formal process—such as better decision-making, increased candidate optionality, and improved internal retention—is now driving greater adoption among small and medium-sized businesses. This shift in thinking has also become increasingly applicable for family-owned enterprises, as many place greater discipline on developing “effective owners” who can lead or serve on the boards of family holding or operating companies.
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