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Governance Review

Enhancing the SOA Governance Structure for Strategic Success

Amanda Hug and Bob Stein March 2025

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As the Society of Actuaries (SOA) navigates a strategic environment marked by rapid and significant changes, which bring challenges and opportunities to the actuarial profession and the SOA, it is important to ensure our governance systems effectively support the SOA strategy. Our Governance Review Project, which is underway, is aimed at ensuring that the SOA’s governance structure effectively supports its evolving strategy. Below, we discuss the challenges and opportunities identified, benefits of change and work being done to address these issues. Additionally, we provide a brief overview of the process and importance of member feedback.

Background

The SOA has a proud history of a strong governance structure that provides excellent oversight of the association. The SOA’s governance system both compares well and is often complimented by association governance specialists for its quality and performance. The SOA’s commitment to maintaining high governance standards is reflected in our robust policies, the diligence of our Board of Directors (Board) and in the SOA’s ability to take action in pursuit of its priorities.

The current governance review project is a testament to the SOA’s dedication to continuous improvement. By undertaking this review, we are taking proactive steps to elevate our governance to an even higher level. The initiative seeks to ensure that we remain at the forefront of professional society governance practice, positioning the SOA to effectively navigate future challenges on behalf of those it serves.

The SOA governance structure regularly evolves over time. Notable revisions have occurred throughout the years; most recently we have instituted a pilot using an external (non-actuary) Board advisor, better defined roles for the presidential officers, a reduction in Board size from 28 to 18 members, and the composition and selection of the Board’s Executive Committee.

The environment in which the profession, our members and the SOA work is changing rapidly, and we face a continuous need to examine and reflect on the governance structure that will best meet the needs of the future. The SOA typically reviews and updates its strategic plan every three years. In 2024, the SOA undertook a regular review of its strategy and made adjustments to ensure the organization remains well-positioned for the future. At the same time, it is also important to identify and address governance changes that may be needed to support successful implementation of the strategy. This project is intended to do just that.

The SOA’s Updated Strategy and Current Governance Challenges

Over the past two decades, the SOA has evolved into a significantly larger, more complex and more global organization. We face many new challenges, including strong competition for talent to enter the profession, the growing importance of global markets, the advent of artificial intelligence, shifting employer expectations, and a changing regulatory and geopolitical climate. It is important that we address these challenges to ensure the profession continues to grow, remains relevant to employers and that actuaries maintain their leadership roles within the industries they serve.

Amid these challenges, the SOA Board of Directors has updated our strategic plan to place primary emphasis on: (1) optimizing the candidate-to-member pipeline, (2) growing the SOA globally and (3) leveraging AI for the benefit of our candidates, members and the profession. As we pursue these strategic priorities, we recognize the need to ensure our governance system is well-adapted to support this strategy by involving relevant perspectives in strategic decision-making and enabling timely decisions.

To address these issues, the Board has commissioned a Governance Review Project and created a Task Force to develop recommendations. An initial list of challenges our governance system experiences includes:

Global Representation. Thirty-five percent of the SOA’s members and 45% of its candidates live and work outside the U.S. Global representation in both the membership and candidate populations has been growing over the past several decades. Despite this, it is very difficult for candidates outside North America (U.S. and Canada) to win seats on the SOA Board of Directors due primarily to the difficulty of achieving the name recognition required for success. This hinders the SOA’s ability to have diverse international perspectives represented on the Board as we seek to create strategies, products and services to serve members and candidates globally.
Board Composition. In addition to global representation, it is also important that the SOA Board of Directors possesses the requisite skills and experience in the core strategic areas being pursued by the SOA. Selecting directors for skills and relevant experience is fundamental to navigating the complex and rapidly evolving challenges within the industry, such as the integration of artificial intelligence, the changing roles of actuaries, and the shifting regulatory and geopolitical landscape. We need to find ways to ensure that we have access to a wide range of Board member perspectives on critical issues, along with skills and relevant experience, at a time when our environment requires flexibility, open-mindedness and innovation. To strengthen the alignment of skills and experience with strategy, changes to the election process are being considered.
Continuity & Effectiveness. SOA Directors serve three-year terms. Although Directors are eligible to run for a second term, there is no priority given for doing so. To serve a second term, they must be selected again by the Nominating Committee and win a new competitive election, regardless of their contributions during their first Board term. In practice, relatively few members serve a second term. This means that the Board’s membership typically consists of about a third of members in their first term and a third completing their service. Short terms and high turnover can also lead to less efficient decision-making as members must get up to speed on issues. It also means that those in Board leadership roles typically have a short window of time, often just one year, to serve in a leadership role, making it more difficult to sustain strategic decision-making.
The President & Chair Roles. Currently the president and chair roles are combined. The SOA president and chair serves simultaneously as the public face or representative of the association and as the chair of the Board. These two roles are quite different. The presidential role is about public-facing representation, stakeholder interaction and organizational outreach. The chair role is about leading the Board of Directors, overseeing and assessing the organization’s strategic direction, and evaluating management’s execution of the strategy. Our current president and chair (combined) selection process arguably emphasizes fitness for the public representation role but is not as well-suited to identify the skills needed by the Chair. The current selection process for the combined Board president and chair role also does not take advantage of the directors’ knowledge about who could best lead the Board as the Chair. Finally, our president and chair serves a three-year term (president-elect, president and chair, and immediate past president), but only one of those years is spent chairing the Board. This is a difficult assignment to learn well in a single year, and it might make sense to separate the president and chair roles to give Board Chairs the opportunity to serve for more than a single year to sustain Board momentum and longer-term strategic initiatives.

Benefits of Governance Changes

Adapting our governance structure to the times in which we live is vital for the SOA’s continued effectiveness and its ability to do the work needed for the profession. By undertaking this project, the Board seeks to:

Enhance the Board’s Strategic Decision-Making: A variety of possible changes, from expanding the diversity of viewpoints on the Board to encouraging more directors to serve longer total terms to better align directors’ skills with issues facing the Board today, could enhance the Board’s strategic decision-making abilities.
Increase Global Representation on the Board. Increasing the presence on the Board of members from the major markets we serve will help ensure that our governance structure better reflects and understands the needs of our global membership.
Optimize and Support Effective Board Leadership. Refining our processes to fully recognize both aspects of President and Chair service (i.e., public representation and leading the Board, as well as assessing strategic direction and evaluating management’s execution of the strategy) by separating the roles is one consideration for strengthening both offices. Possibly increasing term length for Board service of the Chair could allow members to serve longer in leadership roles, see through longer-term decisions, and lead to more consistent and effective leadership.
Align Skills and Experience of Board with Primary Strategic Objectives. Focusing on skills and relevant experience in the selection of Board members ensures that the Board possesses the necessary expertise to navigate complex and evolving industry opportunities and challenges. By aligning the Board’s composition with the strategic objectives, we can create a governance structure that is both resilient and innovative, capable of making strategic decisions that align with long-term objectives and future demands of the SOA and the profession. Adjusting the election process may be necessary to reflect these criteria.

Task Force

The Board has named a special Governance Review Task Force to lead this review. The Task Force comprises ten participants, including current and former Board members. Individuals were selected based on their extensive knowledge of governance practices, including expertise in global corporate structures and their deep understanding of the SOA.

Project Process and Member Communications

The Board has asked that this project be widely communicated to members. Since the project launched in fall 2024, the SOA has announced it to members through a variety of channels, including the SOA website, SOA News Weekly and social media channels. We have also conducted surveys, various stakeholder conversations, numerous “small group” discussions with key volunteer groups and member communities and held multiple virtual “town halls” (webcasts) to discuss the issues with members and to receive their feedback and thoughts.

FOR MORE

Direct questions or comments about the SOA’s Governance Review to govreview@soa.org.

As the project continues and specific reform ideas are developed, the Board is committed to communicating those ideas with members, too. We will continue to use a variety of means to gather member feedback, including member surveys when needed. The Board considers member input for this project crucial to its success.

Conclusion

The SOA’s governance review project is a critical initiative aimed at enhancing our structure to better support the SOA’s future success. By addressing challenges and implementing targeted changes, we can create a governance system that is more efficient, globally representative, and capable of fostering well-informed, timely and effective strategic decision-making. This project reflects the SOA’s commitment to continuous improvement and our dedication to meeting the evolving needs of the actuarial profession.

We look forward to the active participation of SOA members in this important endeavor as we work together to strengthen our organization and the actuarial profession for the future.

Amanda Hug, FSA, MBA, MAAA, is President & Chair of the Society of Actuaries.

Bob Stein, FSA, CPA, MAAA, is Chair of the SOA’s Governance Review Task Force.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.