Tackling 2025: Strategic Priorities and Compliance Challenges

Corporate Governance, C-Suite Strategies

Welcome to 2025! C-suite leaders are stepping into a year packed with political, tech, and societal shifts. From rethinking DEI strategies to keeping up with the lightning-fast evolution of AI and tackling new compliance hurdles, this year is all about staying sharp, flexible, and ahead of the curve. Here’s how execs can gear up for the challenges and opportunities coming their way.

DEI: Navigating a Shifting Corporate Landscape

The return of a Trump administration in 2025 is poised to bring intensified scrutiny and pressure on corporate DEI programs. Industry giants like Walmart, Boeing, and Ford have already scaled back DEI initiatives in response to legal challenges and activist pressure (HR Executive). According to research from i4cp and the Texas Diversity Council, this trend will likely continue, with some companies dismantling DEI roles altogether.

Even with these challenges, many companies are sticking with their DEI commitments. In fact, 57% of chief diversity officers say their DEI budgets will stay the same, and 29% expect increases. For C-suite leaders, this means deciding if they’ll keep current DEI programs, cut back, or adjust by showing how DEI directly impacts business outcomes.

Lorrie Lykins, vice president of research for i4cp, underscores the importance of clear communication strategies to broaden employees’ understanding of DEI. “Organizations that have mature DEI strategies and programming in place are the ones that are seeing the results” Lykins notes. “They’re the ones that have the data about the benefits of this, and they’re the ones that are unwavering saying, ‘We’re moving ahead and the work continues, and we will not be swayed.’ ”

Preparing for Compliance in a New Political Era

With political transitions come potential changes to employment laws and regulations. HR compliance will be a top priority for executives in 2025. Employment lawyers emphasize the importance of monitoring key government appointments, as leadership changes in agencies like the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB) can significantly impact workplace policies (HR Bartender).

Rolling back compliance policies can be just as challenging as implementing new ones. C-suite leaders must determine whether to maintain existing policies, even if mandates are lifted, and plan for comprehensive reviews of employee handbooks and policies. “Organizations are going to look to HR to help guide them through any changes,” advises Sharlyn Lauby of HR Bartender. Legal counsel can provide valuable recommendations on proactive steps to stay compliant and minimize organizational risk.

Lauby also highlights the need for HR departments to regularly review handbooks and policies to ensure they reflect current regulations. “If your organization doesn’t have this on their calendar, it might be a good idea to add it,” she suggests. Staying ahead of compliance changes is critical to avoiding outdated information and maintaining trust with employees.

Embracing AI and Workforce Upskilling for Sustainable Growth

The decade ahead is set to be defined by AI and digital transformation. According to KPMG’s CEO Outlook, 92% of global business leaders remain optimistic about their organizations’ future, with a focus on AI investments and workforce development to drive sustainable growth (CEOWORLD Magazine).

CEOs are juggling two big tasks: rolling out generative AI and helping their teams level up to keep up with the changes. A skills-first mindset—focusing on what skills are needed for each job and matching the right people to them—is catching on. It’s a smart move that makes companies more agile, ramps up productivity, and keeps employees motivated.

“By embracing digital transformation and focusing on talent development, CEOs aim to address immediate operational challenges while positioning their companies for long-term, sustainable growth,” the KPMG report highlights. Investments in AI tools can also support DEI initiatives by providing data-driven insights into employee retention and workplace culture (HR Executive).

Balancing ESG Initiatives Amid Uncertainty

Environmental, social, and governance (ESG) considerations remain integral to long-term business value. While geopolitical tensions and regulatory uncertainties complicate ESG efforts, CEOs recognize that balancing ambition with caution is essential. ESG initiatives not only mitigate stakeholder criticism but also contribute to sustainable growth and brand reputation.

C-suite leaders must ensure that ESG commitments are woven into the fabric of their business strategy, even as external pressures mount. Failure to do so can lead to internal backlash, tarnished brands, and talent attrition (HR Executive).

Key Takeaways for C-Suite Leaders in 2025

DEI Strategy: Evaluate the future of DEI in your organization. Develop data-driven DEI initiatives that align with business metrics and communicate these efforts effectively.
Compliance Readiness: Monitor government appointments and prepare for potential regulatory changes. Conduct regular reviews of handbooks and policies to stay compliant.
AI and Skills Development: Invest in AI technologies and adopt a skills-first approach to workforce development. Prioritize upskilling to ensure agility and resilience.
ESG Integration: Balance ESG ambition with caution. Align ESG initiatives with long-term business goals to maintain stakeholder trust and organizational growth.

As 2025 unfolds, C-suite leaders who embrace these strategies will be well-equipped to navigate disruption and drive their organizations toward sustainable success.

Resources: Corporate DEI: What to expect in 2025 with the new Trump administration, KPMG Navigates a Decade of Disruption: How CEOs Are Preparing for the Future, 2024: A Year of Debate (RTO), How to Prepare for HR Compliance in 2025, More complexity, more non-human IDs and shifting strategies — identity predictions for 2025

Preparing for the 2025 Regulatory Landscape: Key Areas of Change C-suite Leaders Need to Know

Desirée Sykes

With 2025 swiftly approaching, business leaders are preparing for significant regulatory changes that could reshape their operation. According to PwC’s October 2024 survey, 76% of CEOs report that regulatory concerns weigh heavily on their decision-making. Many executives also believe that increased regulations are inevitable, regardless of the upcoming election outcome, reinforcing the importance of proactive compliance strategies. Below are key areas where regulatory and compliance changes are expected to have the greatest impact in 2025:

Data Privacy and Evolving Regulations

Data privacy frameworks will remain a focal point in 2025. New state regulations, modeled after the California Consumer Privacy Act (CCPA) and the New York SHIELD Act, mandate stricter data governance and transparency in data handling. Additionally, The FTC’s click-to-cancel rule, expected to take effect in early 2025, adds another layer of compliance by requiring companies to streamline subscription cancellations and renewals. Businesses will need to upgrade their data management protocols, ensuring compliance with both state and federal standards to maintain customer trust and avoid penalties.

AI Regulation and Technology Oversight

AI investments will remain a strategic priority, with over 90% of CEOs stating they will increase or maintain spending on AI technologies despite potential regulatory changes. The European AI Act and emerging U.S. regulations reflect growing concerns over AI ethics, bias, and misuse. Companies must adopt compliance frameworks that address these risks while leveraging AI for operational efficiency. Businesses that proactively manage AI-related risks will not only comply with new standards but also gain a competitive advantage in the marketplace.

Operational Resilience and ESG Reporting Requirements

Operational resilience will also be a key regulatory focus in 2025. Businesses need to enhance their crisis management frameworks to address risks ranging from climate-related disruptions to supply chain challenges. Additionally, Environmental, Social, and Governance (ESG) reporting will become mandatory for many organizations, following new global disclosure standards. By integrating ESG metrics into their annual reports, business leaders can align with these evolving standards and improve their stakeholder transparency.

Seizing Opportunities Amid Regulatory Change

While new regulations may pose challenges, they also offer opportunities for forward-thinking businesses. Jim Schleckser, CEO of The CEO Project, argues that companies capable of rapid adaptation can outmaneuver competitors by treating compliance as a strategic advantage. The FTC’s click-to-cancel rule, for example, will reward businesses that adopt customer-friendly practices early, enhancing customer loyalty and brand reputation. Schleckser likens this approach to steering a speedboat—those who act quickly will gain the upper hand in turbulent regulatory waters.

C-suite leaders must also engage with lawmakers and regulatory bodies to stay ahead of new rules. Building relationships with policymakers and participating in industry advocacy efforts can help businesses shape future regulations and reduce compliance risks.

In 2025, regulatory change will test the agility and resilience of businesses. Companies that view compliance as an opportunity rather than a burden will thrive. Whether adapting to AI regulations, privacy mandates, or ESG reporting requirements, executives who stay proactive will gain a competitive edge. Leaders in the C-suite must foster a culture of innovation and flexibility, enabling their organizations to navigate the evolving regulatory landscape confidently and emerge stronger.

Resources: PWC, CEO Latest findings from PwC’s Pulse Survey, INC 500, Government Regulations Can Help Your Business. Here’s Why Reacting with speed in a changing environment is a competitive advantage., CEO NA, Consumers set to save millions with new ‘click to cancel’ rule, KPMG, Regulatory Insights, Amstelveen, Key Compliance and Regulatory Themes for 2025, SecurityPal, Regulatory and Compliance Challenges in InfoSec: A U.S. Forecast for 2024-25

Mastering Regulatory Compliance in a Shifting Landscape

Desirée Sykes

C-suite executives are expected to stay ahead of changing laws and regulations to avoid risks, protect their organizations, and maintain an edge in their industries. This can be incredibly challenging as regulatory changes come from many sources including government legislation, industry standards, and international agreements. Navigating these shifts requires constant vigilance and adaptability, as regulatory frameworks continue to evolve across different jurisdictions. For instance, the General Data Protection Regulation (GDPR), in the European Union, has set a global benchmark for data privacy, prompting the rise of similar laws in other regions. Additionally, environmental regulations are becoming more stringent, driven by global and organizational initiatives to help fight climate change. Initiatives like Corporate Social Responsibility (CSR) are no longer optional but necessitated by society.

Let’s further explore the trends in regulations involving changes in data privacy, environmental sustainability, and corporate governance.

Key Regulatory Changes to Watch

Digital Transformative Technology

With more and more costly data breaches on the rise, regulators worldwide are tightening data privacy laws. For example, the California Consumer Privacy Act (CCPA) and its updates have set landmark standards for data protection in the U.S. The California Privacy Protection Agency (CPPA) also recently released a draft of regulations on artificial intelligence (AI) and automated decision-making technology (ADMT) usage. Even though the regulations are still in development, Matt Kosinski urges organizations to pay close attention to their development because “the state is home to many of the world’s biggest technology companies, any AI regulations that California adopts could have an impact far beyond its borders.” In addition to the CPPA’s draft of regulations on AI and AMDT, the European Union (EU) passed the EU AI Act. According to artificialintelligenceact.eu, “Like the EU’s General Data Protection Regulation (GDPR) in 2018, the EU AI Act could become a global standard, determining to what extent AI has a positive rather than negative effect on your life wherever you may be.”

Environmental Regulations

Organizations face stricter environmental regulations now more than ever with initiatives such as CSR being driven by governing bodies globally. In May 2024, the Council of the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD). Anna Hauck offers this summary of the directive, “Once in force and transposed into national laws, the CSDDD will require companies falling within the scope of the law to perform risk-based due diligence, in order to identify and address any adverse impacts on human rights and the environment in their own operations, those of their subsidiaries, and their direct and indirect business partners.” This directive from the EU underscores the rising demand for social and environmental responsibility.

Corporate Governance

Enhanced corporate governance regulations are placing greater emphasis on transparency, accountability, and ethical business practices. The Sarbanes-Oxley Act (SOX) in the U.S. continues to influence corporate governance standards, with recent updates focusing on executive compensation and board diversity. Even though SOX comes from U.S. legislation, it affects companies participating in U.S. stock exchanges. According to an article from RSM, “While compliance with SOX may initially pose challenges, it can also confer a competitive advantage by enhancing transparency, credibility, and investor trust, thereby facilitating access to capital and opportunities for growth.” In addition to SOX, the Corporate Transparency Act (CTA) provides regulations to combat money laundering, terrorism financing, and other illicit financial activities by increasing transparency in corporate ownership. As of January 1, 2024, the Corporate Transparency Act (CTA) requires many U.S.-based and registered companies to report beneficial ownership details to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), regardless of their business activities.

Global Trade Compliance

Trade regulations are also adjusting with new tariffs, sanctions, and trade agreements affecting global supply chains. Companies engaged in international trade must stay informed about these changes to avoid disruptions and maintain compliance with customs regulations. In an article from the World Economic Forum (WEF), “In the last 10 years alone, the volume of cross-border trade increased by around 25%.” WEF’s article, which focuses on digitalization’s role in disrupting global trade, notes this trend in global trade compliance:

“Trade regulation is also becoming more interconnected with domestic policies. New sustainability measures such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), for example, target production processes that take place within the export market but are enforced at the border before entering the import market.”

Strategies for Staying Ahead of Regulatory Changes

C-suite executives should regularly monitor regulatory developments in their industry and region by subscribing to legal and regulatory updates, participating in industry forums, and consulting with legal experts. It is also important to strengthen your compliance programs. This includes developing comprehensive policies and procedures, regularly conducting compliance audits, and providing ongoing training for employees. Technology also plays a critical role in helping to ensure compliance. For example, automated compliance management systems can help companies track regulatory changes while data analytics can be used to identify compliance gaps.

Furthermore, networking to build strong relationships with regulators can provide early warnings about upcoming changes. There are a variety of ways to engage regulators such as participating in public forums and joining industry associations. In addition, compliance should be embedded in organizational culture. Professionals in the C-suite should encourage ethical behavior at the top level and promote transparency. Rewarding compliance can create a workplace environment where regulatory adherence is a shared responsibility.

Navigating the “in flux” regulatory landscape is a constant challenge for C-suite executives. By staying informed, strengthening compliance programs, leveraging technology, engaging with regulators, and fostering a culture of compliance, organizations can turn regulatory challenges into opportunities. In an era of heightened scrutiny, compliance is not just about avoiding penalties—it’s about building a proactive, resilient, and sustainable business that will better the life of future generations.

Resources: IBM, What you need to know about the CCPA draft rules on AI and automated decision-making technology, Thomson Reuters, What the latest step in CSDDD means for corporate risk and legal professions, WEF, Digitalization is disrupting global trade – here’s how AI can help customs and businesses to respond, Baker Botts, The Corporate Transparency Act: It’s Time to Prepare for the January 1, 2025 Deadline