Are your board's AI blindspots putting your company at risk?

AI should be a boardroom priority - not enough boards have the skills to make it so.

For decades, companies have relied on boards staffed primarily with seasoned industry veterans—leaders whose deep expertise has been shaped by years of very valuable experience. But today, AI can learn and replicate much of that expertise at scale, exposing an uncomfortable reality: a board composed solely of traditional industry experts is no longer enough. To stay relevant and to adequately protect the interests of all stakeholders, businesses must balance domain expertise with AI skills at the board level.

Here’s why AI literacy is now an essential requirement on every board.

1. AI is already shaping competitive landscapes

AI is transforming industries at a speed that makes traditional competitive advantages obsolete. Companies that fail to integrate AI strategically will fall behind (that’s being generous)—not in a decade, but within just a few years. Boards need to be able to understand all the nuances that impact AI’s potential to drive efficiencies, unlock new revenue streams, and disrupt traditional business models. In order to do that, boards need deep AI expertise.

2. Regulatory and legal risks are mounting

AI regulation is evolving rapidly. From GDPR and AI bias concerns to emerging laws on AI accountability, regulatory frameworks are tightening worldwide. Boards that lack deep AI knowledge risk exposing their companies to fines, legal battles, and reputational damage. They need to ensure compliance and ethical governance from the start.

3. Fiduciary responsibility includes AI oversight

Board members are responsible for risk management—and AI is one of the biggest business risks (and opportunities) of the decade. Without a fundamental understanding of AI, directors cannot provide informed oversight on AI investments, security risks, or ethical concerns.

4. Too many boards rely on domain expertise that AI can now replicate

Traditional boards are stacked with industry veterans whose knowledge has been built over decades. But AI can now process, analyse, and predict industry trends faster than any human expert. While this doesn’t make experienced board members obsolete, it does mean that strategic leadership must evolve. The key isn’t replacing domain experts, but ensuring AI fluency exists alongside them to make better, future-proof decisions - or companies are risking their competitive advantage.

5. AI literacy prevents hype-driven decision-making

Without AI knowledge, boards are vulnerable to misleading claims from vendors, consultants, and internal teams. Too many organisations waste money on AI projects that sound impressive (AI IS impressive) but fail to deliver real value. A board with AI expertise can ask the right questions, challenge assumptions, and ensure investments are sound.

6. AI is impacting every business function

From HR and finance to marketing and operations, AI is changing how decisions are made. Boards that don’t understand AI will struggle to evaluate the effectiveness of these transformations. If directors aren’t fluent in AI’s impact, they won’t be able to provide strategic oversight. They’ll be overly impressed by AI (again, it is impressive), without applying critical thinking and asking the necessary questions.

7. Cybersecurity threats and AI ethics demand attention

AI-powered cyber threats are on the rise, from deepfake scams to automated phishing attacks. AI bias and unethical decision-making can lead to PR disasters and legal repercussions. Boards need to actively discuss how AI is secured, audited, and ethically implemented. And they need the AI knowledge to hold leadership teams to account on this stuff.

8. Investors and stakeholders expect AI accountability

Investors are increasingly asking tough questions about AI strategy. They want to know how AI is being used, what risks it presents, and how it will drive financial returns. A board without AI knowledge risks losing investor confidence and missing out on capital opportunities.

9. Without AI expertise, boards can’t critically evaluate AI investments

Companies that fail to assess AI initiatives properly often overspend or invest in the wrong technology. AI-literate boards can ensure due diligence, prevent overhyped investments, and drive sustainable AI adoption that delivers measurable value.

10. AI skills at the leadership level are now a competitive advantage

Companies with AI-literate boards will attract top talent, form stronger partnerships, and gain a strategic edge. AI is no longer optional knowledge—it’s a leadership requirement.

The cost of inaction is high

AI is not a future concern; it is shaping business today. Boards that fail to effectively address and manage the implications of rapid changes being brought about by AI are leaving themselves exposed. No board can effectively execute its fiduciary duty while leaving an AI blindspot unaddressed.

The best time to build AI literacy at the board level was last year. The second-best time is now.