The Corporate Board AI Imperative

“We are changing every workflow in every industry for every persona for every corporation and that will happen in the next 2 years.”

                -- Bill McDermott, CEO of ServiceNow,

Artificial Intelligence (AI) is no longer a peripheral consideration for corporate boards—it is central to the survival and success of businesses across all industries. From reshaping customer experiences to automating operations and enabling entirely new business models, AI is transforming the competitive landscape at an unprecedented pace. For CEOs, investors, and board directors, this presents a clear mandate: develop the expertise and governance structures necessary to navigate an AI-driven future effectively or risk becoming obsolete as the business landscape rapidly evolves around you.

Yet, many boardrooms are woefully unprepared for this challenge. The average age of board members at publicly traded companies is 63, nearly all or whom have no direct experience or engagement with AI, leaving them ill-equipped to address its transformative impact on the business. While these directors bring invaluable experience in strategy and leadership, they often lack the technical literacy and familiarity with AI necessary to assess its transformative potential—or its risks.

The stakes couldn’t be higher. Boards that fail to engage meaningfully with AI risk falling behind competitors, exposing their companies to disruption, and failing in their fiduciary duties to shareholders.

AI Governance: A Corporate Responsibility for the Modern Era

AI governance is not just a matter of technological oversight—it is a fundamental business responsibility with strategic implications. Poor governance can lead to missed opportunities, unaddressed risks, and long-term harm to a company’s reputation and value.

Why is governance critical?

1. AI is reshaping industries. Companies that fail to embrace AI are at risk of being outperformed by competitors who leverage it to lower costs, improve customer experiences, and innovate faster.

2. AI introduces unique risks. From algorithmic bias to data security and regulatory compliance, AI carries challenges that boards must oversee.

3. AI requires a new kind of leadership. Directors must be able to understand AI’s potential, ask informed questions, and evaluate strategies that integrate AI into the business.

   
   

The Generational Gap in AI Governance

The generational dynamics of today’s boards further complicate the challenge. The average age of board members suggests a wealth of experience in traditional business management but also a potential blind spot: many directors have not managed or led during the AI era.

This gap can manifest in several ways:

• Limited technical literacy. Many directors are far removed from the underlying technology driving AI. Terms like "machine learning models," "synthetic data," or "multi-agent orchestration" likely feel esoteric rather than essential.

• Outdated competitive assumptions. Directors accustomed to evaluating competitors through traditional lenses may struggle to recognize how AI enables new business models or disrupts existing ones.

• Overreliance on advisors. While consulting firms like Accenture and Deloitte are valuable resources, boards must be equipped to evaluate their recommendations critically rather than defer entirely to external expertise.

  
  

Bridging the Knowledge Gap: A Call to Action for Boards

To ensure effective governance in the age of AI, boards must address the knowledge gap head-on:

1. Invest in ongoing education. Directors should prioritize workshops, certifications, and expert-led sessions on AI to gain a foundational understanding of the technology.

2. Establish an AI oversight committee. Similar to strategic alternatives committees, this group would evaluate AI strategies, oversee risk management, and provide guidance to management.

3. Recruit board members with meaningful AI knowledge or expertise. Board NomGov committees must prioritize the recruitment of new board members with the expertise necessary to provide critical perspective on AI.  

   
   

The Corporate Responsibility of the Future

AI is not just a passing trend; it is a paradigm shift with implications for every industry. Boards that fail to act risk falling behind, not only in competitiveness but also in fulfilling their fiduciary responsibilities. CEOs and investors must demand that boards close the AI knowledge gap, while directors themselves must embrace the challenge of governing in this new era.

The message for today’s leaders is clear: Governance in the age of AI requires both adaptability and action. Those who rise to the challenge will define the future of their organizations. Those who don’t risk being left behind. The choice is yours.