AI in the Boardroom: A Strategic Imperative

Artificial Intelligence (AI) is no longer a futuristic concept but a transformative force reshaping industries, decision-making processes, and corporate governance. The question of whether AI belongs in the boardroom has sparked critical conversations about how boards can adapt to this seismic shift. Patricia Lady's article, "Does AI Belong in the Boardroom?", explores this topic, emphasizing the need for boards to embrace AI as a strategic imperative rather than a mere technology issue. Her insights draw from Deloitte’s report, ‘Successful AI Oversight May Require More Engagement in the Boardroom,’ which emphasizes the importance of board-level engagement with AI.

The Current State of AI in Boardrooms

Despite AI’s growing role in business operations, Deloitte's survey revealed that 45% of board directors and executives reported that AI is not yet a formal item on their boardroom agendas. Deloitte, in their article's promotion, rounds this statistic up to "nearly 50%" and gets relayed in Patricia Lady’s post as "50%." This gradual shift in precision, from the original data to its subsequent representations, is a subtle yet significant illustration of how information can evolve as it is communicated. It underscores the inherent variability in human interpretation and highlights the importance of understanding AI, especially generative AI systems built on human knowledge

Why Some Companies Overlook AI Governance

Boards of non-tech companies often fail to prioritize AI governance, mistakenly assuming that AI is only relevant to software or tech firms. This misconception overlooks the pervasive influence of AI, which extends beyond product development into operational efficiencies, customer insights, and competitive positioning. A recent article from the World Economic Forum highlights that while 73% of C-suite executives recognize the importance of ethical AI guidelines, only 6% have implemented them, reflecting a significant governance gap[^3]. Similarly, the Brookings Institution emphasizes that non-tech companies frequently lack the necessary frameworks to address AI risks, despite their legal “Duty of Care” to mitigate potential harms[^4]. This gap is particularly concerning as AI increasingly reshapes industries at scale, with even non-tech businesses leveraging these technologies for transformative purposes[^8]. As noted in an article by Solutions Review, failing to integrate AI oversight into governance structures risks compliance issues and undermines trust with customers and stakeholders[^2]. These findings underscore the urgency for boards across all sectors—not just in tech—to adopt robust AI governance practices.

The Importance of AI Understanding in the Boardroom

This lack of governance often stems from a deeper issue: a limited understanding of AI’s transformative potential. Boards that dismiss AI as merely a “tech concern” fail to grasp its seismic implications, not only as a technological advancement but as a force reshaping entire industries and societies. Misinterpretations and slight modifications in data, for example, can accumulate over time, leading to significant impacts on decision-making and strategic planning.

While companies with a software focus have long understood the need for safety, reliability, and ethical considerations in AI, non-tech boards must recognize that AI touches every facet of business and society. Think about the Internet, the iPhone, the cloud, and electricity—massively disruptive technologies that redefined the world. AI’s potential is even broader. If just half of all industries adopt AI and global productivity rises by 10%, the ripple effects will transform supply chains, workforce deployment, corporate organization, and the tools businesses use daily. Boards must approach AI not simply as another emerging technology but as a societal shift with profound political, economic, and social implications. To lead effectively in this new era, boards must commit to understanding AI at a fundamental level and embedding its governance into their core responsibilities.

A Call to Action for Boards

Patricia Lady's article provides a simple and actionable four-step framework for boards:

1. Understand Current AI Use

2. Leverage Diverse Expertise

3. Ongoing Education

4. Ethical Oversight

At The Savvy Founder, we expand on this framework, offering deeper insights and practical advice to ensure your board effectively navigates the AI landscape:

1. Understand Current AI Use:

   Don't settle for a superficial understanding of AI within your organization. Instead, grasp its transformative potential—not just for your company, but for the world stage, your community, and your children’s children. AI is far more than a set of regulations to comply with; it's a powerful force with wide-reaching implications. At The Savvy Founder, we urge boards to dig deep, comprehensively exploring the broader opportunities and challenges AI presents.

2. Leverage Diverse Expertise:

   While leveraging existing board expertise is important, relying solely on conventional wisdom regarding technology can be limiting. Boards should actively cultivate diversity of thought, bringing in individuals with broad opinions and backgrounds to provide a more holistic view. This will lead to a more robust and informed AI strategy.

3. Ongoing Education:

   A clear understanding of AI unlocks a world of possibilities. At The Savvy Founder, continuous education is key to harnessing the full potential of AI. This goes beyond simply understanding the technology itself. It's about exploring the ever-evolving landscape of AI applications, understanding emerging trends, and fostering a culture of continuous learning and adaptation within the boardroom. This empowers boards to make informed, agile decisions and stay ahead of the curve in the rapidly evolving world of AI.

4. Ethical Oversight:

   Establishing frameworks for ethical and strategic oversight of AI initiatives is crucial. Companies thrive when boards and management align their AI strategies to balance innovation and ethics. At The Savvy Founder, we provide guidance on how to build these frameworks. Ethical oversight will help mitigate risks, build trust with stakeholders, and ensure that AI is leveraged for the greater good.

Conclusion

Failing to address AI at the board level could lead to missed opportunities and increased risks. Boards must proactively integrate AI governance into their agendas by understanding current AI use, leveraging expertise, providing ongoing education, and establishing ethical oversight frameworks. By doing so, they can harness AI's transformative potential to drive sustainable growth and industry leadership.

References

1. Lady, Patricia. "Does AI Belong in the Boardroom?" LinkedIn Article (January 9, 2025). Link

2. Deloitte Insights. "Successful AI Oversight May Require More Engagement in the Boardroom." Link

3. World Economic Forum. "Why corporate integrity is key to shaping the use of AI." Link

4. Brookings Institution. "The three challenges of AI regulation." Link

5. Solutions Review. "The Future of AI Governance: What 2025 Holds for Ethical Innovation." Link

6. Economist. "Non-tech businesses are beginning to use artificial intelligence at scale." Link