From Reflection to Action: Shaping the Year Ahead

As we look ahead to 2026, uncertainty remains a defining feature of the environment in which Irish businesses and boards operate. This time last year, government formation talks were ongoing, and a new administration was preparing to take office in Washington.

Twelve months later, change is still the constant. From a national perspective, we have recently had a Government reshuffle, and ongoing regulation changes from the EU. Beyond our shores, volatility remains the order of the day. From tariffs and ongoing conflicts to geopolitical tensions, the external environment continues to be unpredictable.

A Positive Outlook But Action Needed to Ensure Competitiveness

Against this backdrop, business leaders have remained positive about the future of the Irish economy and their own business performance. New IoD Ireland research found that 43 per cent were more positively confident about 2026, with 89 per cent planning to maintain or increase their staff numbers. While influencing the global trading environment for Irish businesses is beyond our control, there are significant measures we can implement domestically to enhance competitiveness. When asked about what the leading driver for business growth and competitiveness is, directors have cited the importance of digital transformation and innovation.

Furthermore, business leaders continue to strongly support significant investment in infrastructure (such as housing, energy, water, transport, and high speed broadband) as a foundation for long-term competitiveness. We welcome the publication of the Accelerating Infrastructure Report and Action Plan. The plan sets out 30 targeted actions in a rapid implementation timeline in 2026, with support and oversight by the Accelerating Infrastructure Taskforce and the Cabinet Committee on Infrastructure.

That positive outlook does not mean that Irish businesses are not in need of urgent relief from the increasing regulatory burden. While the EU continues to roll out plans and proposals as part of the Competitiveness Compass to reduce the regulatory burden on business, such as with the Digital Omnibus and Sustainability Omnibus, Irish businesses will nevertheless face additional regulatory challenges in the coming year, including pay transparency requirements, the introduction of the national auto-enrolment pension scheme, and other new legislation.

This is a classic case of controlling the controllables. The Government must adopt a laser-like focus on addressing the regulatory burden and the cost environment for business. The commitments set out in the Action Plan on Competitiveness and Productivity are very welcome, but the Government must act quickly to turn them into tangible actions if Irish businesses are to remain competitive in a rapidly changing global environment.

The Government will also have an opportunity to shape external events when Ireland takes over the EU Council Presidency in July 2026. This is not only a chance to showcase Ireland to the world, but also an opportunity to make a real difference to the direction of travel of European regulations. On the list of Presidency priorities, our members have flagged the simplification of regulation as a key priority for the Government.

Regulated Financial Services | INED Remuneration and Regulation

A notable regulatory development this year has been the introduction of the Central Bank of Ireland’s Senior Executive Accountability Regime (SEAR), which came into effect for independent non-executive directors (INEDs) on 1 July 2025. For the first time, INEDs are explicitly brought within the regime’s scope, a shift that underscores the growing regulatory focus on personal accountability and oversight at board level.

This inclusion has captured the attention of boardrooms nationwide, not only for its compliance implications but also for what it signals about the future expectations of INED roles. IoD Ireland member research earlier this year revealed a divided response: while 47 per cent of directors said SEAR would not discourage them from taking on future INED roles, 15 per cent felt otherwise, and a noteworthy 39 per cent remained uncertain. That level of hesitation indicates an emerging inflection point. Directors recognise the value of stronger accountability but are still calibrating how this evolving framework will affect their willingness to serve.

Our Board Director Remuneration and Governance 2025/26 research, published in November, provides further context on how regulatory developments such as SEAR are influencing board priorities and skill expectations. The findings show that in financial services, Director and Chair remuneration remains in the mid-to-upper tier range (73 per cent and 74 per cent respectively), suggesting this sector continues to value experienced directors capable of navigating complex regulatory requirements.

Ultimately SEAR is designed to improve governance and responsibility in the financial sector, and in 2026 we are committed to supporting our members to enhance clarity, understanding and adaptability of these new rules.

Elevating Governance Standards Across State Boards

In recent years, governance in State bodies has often attracted attention for the wrong reasons. State bodies play a vital role in advancing Ireland’s economic efficiency, competitiveness, social cohesion, and regional development. With significant budgets and responsibility for critical services, their governance must inspire public trust and confidence.

As part of our commitment to enhancing governance standards nationally, IoD Ireland undertook an in-depth research project and published a paper this year titled, ‘Supporting High Standards of Governance in State Bodies in Ireland’, capturing the real experiences of directors and senior managers within State bodies, including the practical application of the Code of Practice.

Our paper set out strategic recommendations to strengthen accountability, transparency, and oversight, while improving the Code to better reflect modern governance requirements. We engaged directly with Minister Jack Chambers TD and the Department of Public Expenditure and Reform and were pleased that our work was welcomed as a valuable contribution to the national conversation on governance.

Looking ahead to 2026, IoD Ireland will continue to collaborate with government departments, sharing our research and expertise to support the implementation of these recommendations and ensure governance frameworks evolve to meet the needs of a modern Ireland.

Risk and the Board Skills Needed For 2026

Boards will need to navigate an increasingly complex risk landscape while developing new capabilities. Strategy, risk management, and AI expertise are regarded by our members as the most critical skills for board effectiveness over the next two years.

Directors also identify regulatory compliance, financial performance, cybersecurity, and data protection as the greatest challenges they expect to face over the same period. Notably, when asked if their boards had utilised AI-powered tools to support the running of board meetings, 26 per cent said they had and 70 per cent said no. Of boards who are using AI (to support board meetings), 36 per cent are confident that appropriate guardrails (such as policies, cybersecurity measures, and compliance protocols) are in place to ensure responsible and secure use.

These findings underline the vital role of governance oversight of controls and policies, and director education and CPD in supporting effective governance.

As we move into the new year, the Irish business community will maintain its proud record of responding to new challenges with a combination of fortitude and agility. The can-do attitude of Irish businesses has served us well in the past and will be even more important in the years ahead. However, businesses cannot shoulder these challenges alone.

IoD Ireland will be there to support directors and boards by equipping them with governance knowledge and expertise, and connection through our director community. At the same time, Government must play its part by delivering the legislative, regulatory, and infrastructural reforms necessary to ensure Irish business remains competitive and positioned for long-term success.

About the Author

Caroline Spillane CDir is Chief Executive Officer of the Institute of Directors Ireland. She commenced the role in July 2022. Caroline has held several senior leadership roles including most recently as Director General of Engineers Ireland, the all-Ireland professional body for engineers, CEO of the Medical Council of Ireland, the independent statutory regulator of over 25,000 medical practitioners and Assistant National Director of the Health Services Executive.

Caroline is an experienced Non-Executive Director serving as a board member of the Health Information and Quality Authority (HIQA), ESB Networks and Irish Manufacturing Research. She is also a member of the Advisory Group to Balance for Better Business, an independent business-led Review Group established by the government to improve gender balance in senior leadership in Ireland.

Caroline's qualifications include a BA from UCC and an MA from TUD. She is currently undertaking a Doctoral programme with SETU.