From the top down and the bottom up, companies are quickly capitalizing on emerging technologies, namely artificial intelligence (AI). It should come as no surprise that AI is even making its way into the boardroom. Nasdaq’s 2024 Global Governance Pulse survey revealed that AI and cybersecurity skills are top areas for boards seeking to diversify and enhance their composition and align strategically with the adoption of AI and other technologies.
Since the launch of ChatGPT at the end of 2022, the first iteration of Anthropic’s Large Language Model (LLM) Claude in 2023, and the release of DeepSeek in early 2025, companies across industries are rapidly incorporating generative AI into key business processes. As a result, they are able to transform how they interact with customers, streamline operations, accelerate product development, and enhance their product offerings. This amalgamation across and through businesses is prompting boards to thoughtfully evaluate their company’s AI strategy and the board’s oversight thereof.
Technology is now considered a core competency for board members in the same way financial acumen has been. There is a growing need for more thoughtful and active technology oversight where boards can help identify potential gaps and opportunities in the company’s technological directions and implications.
The Strategic Advantage of Tech-Focused Boards
The board and its members can be the company’s most strategic asset that augments the expertise represented in the executive team. They provide governance and oversight, but, when differentiated, board members also help anticipate market developments and ensure risks are mitigated, particularly when those risks—often now digital—are material and disruptive. AI and other innovations have amplified the complexity of cyber threats, making the addition of technological expertise in the boardroom paramount. A deep understanding of technology at the board level can help companies:
- Responsibly integrate emerging technologies. Board members with technology backgrounds can help executive leadership teams determine how to prudently invest in and enable technologies that increase operational efficiency, better understand customer data and behavior, and reveal unexpected market opportunities. Board members with this acumen can help broaden the analysis to ensure corporate-wide integration and translation of technologies that may find new purpose in advancing opportunities.
- Stay competitive in the marketplace. Tech-savvy board members can help future-proof companies by promoting responsible, transparent, ethical, trusted, and timely AI and technology adoption. They can also advocate for necessary investments in digital capabilities to ensure that companies navigate their industries safely while staying ahead of market changes or disruptions. Importantly, the board’s fiduciary duty provides the balance for optimizing technological advancements in a way that does not create undue risk.
- Enhance risk management efforts. Once considered an IT issue, cybersecurity has firmly become a corporate-wide responsibility as regulatory requirements dictate board oversight, and as social engineering and phishing attempts to elicit sensitive data have become more prevalent and affect people at all levels. Board members familiar with modern cyberthreats can offer crucial insights into risk management and regulatory compliance and help protect the company’s assets in a digital-first world.
Standing Still Isn’t an Option
Ignoring the need for knowledge in the areas of AI and cybersecurity at the board level could have far reaching consequences. It may leave the company vulnerable to threats, which can be costly both in terms of the bottom line and brand reputation. In 2024, generative AI was pivotal in sophisticated cyberattacks, like the Famous Chollima threat, which conducted malware attacks and used AI-generated online personas to fraudulently gain access to sensitive corporate data. Other notable data breaches in communications and healthcare saw the global average cost of a data breach rise to $4.88 million.
Companies that are slow to adopt AI may also risk missing operational improvements and new revenue streams. Meanwhile, companies that leverage technology to develop and action new ideas may be better positioned to enable business growth. This requires a corporate culture and governance structure that prioritizes innovation.
But the broader risk is irrelevance. Boards that do not have the requisite technology acumen could miss the risk of their companies falling from an industry leader to a laggard. While digital transformation is continuous, the speed of recent technology disruptions has accelerated, and companies that fail to innovate risk being left behind entirely.
How to Bridge Technology Skills Gaps
Closing the gap in technology knowledge starts with an honest assessment of how well the current board composition meets the changing needs of the company and the market. To help boards begin the evaluation process, consider the following:
- Evaluate current board competencies and gaps. This might be a good opportunity to revisit board succession planning efforts and targeting new board candidates with the right core competencies.
- Identify board candidates who bring hands-on experience in technology leadership roles—and do not be afraid to shake up the board profile in doing so. For example, it is not uncommon for modern boards to include CIOs, CTOs, CISOs, CROs, COOs, Chief Strategy Officers, and other executives who have navigated major digital transformations. These candidates not only understand technology, but they also know how it affects business models, customer engagement, and operational resilience.
- Ensure the board understands that the language of business is changing. Although a finance background was once a minimum requirement for board participation, technology acumen is now becoming equally important. Board members should be conversant in technology, have foundational knowledge in data security, data privacy, and AI, and understand how key technological shifts can impact their company and industry.
According to findings from Nasdaq’s 2024 Global Governance Pulse survey, 38% of respondents said that cybersecurity, data privacy, and information security were among the most important continuing education topics for their board. Board education should be an integral component of promoting board effectiveness and advancing proactive board succession planning. Ultimately, making continuing education a core value of the board and seeking board members who have an appreciation for learning, especially as it pertains to AI and new technologies, will be important to succeeding in this period of innovation.
Written by Kaley Childs Karaffa and Rita Scroggin
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