Boards in the Digital Age: Navigating AI and Cyber-Risks
November 15, 2024, 4:20 pm
The digital landscape is shifting. Non-executive directors (NEDs) are at a crossroads. A recent survey by Gartner reveals a startling truth: 80% of NEDs feel their boards are ill-equipped to oversee artificial intelligence (AI). This sentiment is a wake-up call. The world of technology is evolving rapidly, and boards must adapt or risk being left behind.
NEDs see AI as a golden opportunity. A staggering 91% believe it can enhance shareholder value. Yet, the irony is palpable. While they recognize the potential, they also acknowledge their limitations. Most board members are not digital natives. They lack the tech-savvy needed to navigate this new terrain. Until now, technology rarely dominated board agendas. But the tides are changing. Cyber-risk and AI are now front and center.
Cyber-risk is a looming shadow. The 2025 Gartner Board of Directors Survey highlights this concern. A whopping 93% of NEDs view cyber-risk as a threat to shareholder value. Yet, 67% rate their current practices as inadequate for managing these risks. This is a critical gap. NEDs are aware of the dangers but feel powerless to act effectively.
Interestingly, many NEDs are willing to embrace technology risks. About 58% express a desire to take on more, not less. This willingness to engage with technology is a double-edged sword. It reflects optimism but also a recognition of the need for change. Boards are beginning to realize that technology is not just a tool; it’s a driver of value.
Investment in technology is a priority. When asked about the top investments for shareholder value in the next two years, AI topped the list. It was the number one choice for 63% of respondents. Other technology investments followed closely behind. Cyber-risk investments were favored by 39%. This shows a clear trend: boards are moving beyond mere curiosity about AI. They are actively seeking ways to leverage it for efficiency and revenue.
To bridge the gap in oversight, boards are planning structural changes. A significant 77% of NEDs intend to recruit more directors with technology expertise in the coming year. Additionally, 72% aim to bring in directors with cyber-risk knowledge. This shift indicates a recognition that technology will be pivotal for future success. The next CEO’s tech expertise is now a key factor in succession planning for 53% of NEDs.
As boards evolve, they will increasingly rely on chief information officers (CIOs) and chief information security officers (CISOs). These roles will be crucial in guiding boards through the complexities of AI and cyber-risk. However, communication is key. NEDs prefer financial insights. CIOs and CISOs must adapt their messaging to resonate with board members. They need to frame technology discussions in terms of financial impact. This will enhance their influence and ensure that technology remains a priority.
The landscape of corporate governance is changing. Boards are no longer just guardians of financial health. They are now tasked with overseeing complex technological landscapes. This requires a new mindset. NEDs must become lifelong learners, embracing technology as a core component of their roles.
The urgency is palpable. As AI and cyber-risk continue to evolve, boards must act swiftly. They cannot afford to be passive observers. The stakes are high. Shareholder value hangs in the balance. Those who adapt will thrive. Those who don’t risk obsolescence.
The journey ahead is fraught with challenges. But it also presents immense opportunities. NEDs have a chance to redefine their roles. They can become champions of technology within their organizations. This shift will not only enhance oversight but also drive innovation.
In conclusion, the digital age demands a new breed of board member. One who is not just a steward of the past but a visionary for the future. The road may be rocky, but the destination is worth the effort. Embracing technology is no longer optional; it’s essential. The future of corporate governance depends on it. The time for action is now.
NEDs see AI as a golden opportunity. A staggering 91% believe it can enhance shareholder value. Yet, the irony is palpable. While they recognize the potential, they also acknowledge their limitations. Most board members are not digital natives. They lack the tech-savvy needed to navigate this new terrain. Until now, technology rarely dominated board agendas. But the tides are changing. Cyber-risk and AI are now front and center.
Cyber-risk is a looming shadow. The 2025 Gartner Board of Directors Survey highlights this concern. A whopping 93% of NEDs view cyber-risk as a threat to shareholder value. Yet, 67% rate their current practices as inadequate for managing these risks. This is a critical gap. NEDs are aware of the dangers but feel powerless to act effectively.
Interestingly, many NEDs are willing to embrace technology risks. About 58% express a desire to take on more, not less. This willingness to engage with technology is a double-edged sword. It reflects optimism but also a recognition of the need for change. Boards are beginning to realize that technology is not just a tool; it’s a driver of value.
Investment in technology is a priority. When asked about the top investments for shareholder value in the next two years, AI topped the list. It was the number one choice for 63% of respondents. Other technology investments followed closely behind. Cyber-risk investments were favored by 39%. This shows a clear trend: boards are moving beyond mere curiosity about AI. They are actively seeking ways to leverage it for efficiency and revenue.
To bridge the gap in oversight, boards are planning structural changes. A significant 77% of NEDs intend to recruit more directors with technology expertise in the coming year. Additionally, 72% aim to bring in directors with cyber-risk knowledge. This shift indicates a recognition that technology will be pivotal for future success. The next CEO’s tech expertise is now a key factor in succession planning for 53% of NEDs.
As boards evolve, they will increasingly rely on chief information officers (CIOs) and chief information security officers (CISOs). These roles will be crucial in guiding boards through the complexities of AI and cyber-risk. However, communication is key. NEDs prefer financial insights. CIOs and CISOs must adapt their messaging to resonate with board members. They need to frame technology discussions in terms of financial impact. This will enhance their influence and ensure that technology remains a priority.
The landscape of corporate governance is changing. Boards are no longer just guardians of financial health. They are now tasked with overseeing complex technological landscapes. This requires a new mindset. NEDs must become lifelong learners, embracing technology as a core component of their roles.
The urgency is palpable. As AI and cyber-risk continue to evolve, boards must act swiftly. They cannot afford to be passive observers. The stakes are high. Shareholder value hangs in the balance. Those who adapt will thrive. Those who don’t risk obsolescence.
The journey ahead is fraught with challenges. But it also presents immense opportunities. NEDs have a chance to redefine their roles. They can become champions of technology within their organizations. This shift will not only enhance oversight but also drive innovation.
In conclusion, the digital age demands a new breed of board member. One who is not just a steward of the past but a visionary for the future. The road may be rocky, but the destination is worth the effort. Embracing technology is no longer optional; it’s essential. The future of corporate governance depends on it. The time for action is now.