AI on the Board Agenda: A Strategic Imperative

This informal CPD article, ‘AI on the Board Agenda: A Strategic Imperative’, was provided by Pauline Norstrom CEO of Anekanta AI and Anekanta Consulting, an organisation providing tailored guidance to international organizations for the responsible, legal and ethical development and use of Artificial Intelligence systems from biometrics to high-risk and GenAI.

Artificial Intelligence (AI) is no longer an isolated technology issue it is shaping corporate strategy, risk management, and competitive advantage. However, not all AI is the same. Boards must recognise the distinct opportunities and risks of Generative AI (GenAI) compared to traditional Machine Learning (ML) and ensure they have the AI literacy skills to make informed decisions.

Unlike conventional software or predictive analytics, GenAI can synthesise insights across an entire organisation, generating new content and patterns that may not be entirely predictable or explainable. This creates both strategic opportunities and business risks, reinforcing why AI governance must be an active, board-level priority.

AI Literacy: A Boardroom Necessity

For boards to lead in an AI-driven world, AI literacy is essential. This does not mean deep technical expertise, it means understanding AI’s impact on decision-making, business risks, regulatory expectations, and corporate strategy. Without foundational AI literacy, boards risk overlooking missing AI-driven business opportunities and critical governance gaps.

Key aspects of board-level AI literacy include:

  • Understanding AI capabilities and limitations – Knowing how different AI models (ML vs. GenAI) function, their benefits, reliability, and their risks.
  • Recognising AI-driven risks – Identifying how AI can create unintended bias, regulatory exposure, or reputational damage.
  • Challenging AI decision-making – Ensuring AI-generated outputs are transparent, explainable, and aligned with corporate objectives.
  • Embedding AI into enterprise risk management – Treating AI risks like financial and cybersecurity risks, with proper oversight and controls.
  • Boards cannot delegate AI oversight solely to IT teams – IT teams need board support through AI strategy and risk being integrated into corporate governance.

Why Generative AI Requires a Different Approach

GenAI differs fundamentally from traditional ML and automation tools:

  • It finds patterns across disparate datasets – GenAI can surface hidden insights, but without strong data controls, it could inadvertently expose sensitive information.
  • Its outputs can be unpredictable – Unlike ML models that provide structured predictions, GenAI generates new content dynamically, increasing the risk of misinformation or biased results.
  • It bypasses traditional data security frameworks – Employees using GenAI tools may unknowingly expose proprietary data through AI-generated outputs or poorly controlled prompts.
  • It evolves continuously – AI models do not remain static; they learn and change, meaning governance must be cultural shift towards a living process rather than a one-time policy.

This ability to synthesise and generate insights across an entire organisation makes GenAI an extremely powerful business tool. On one hand, it enhances decision-making and efficiency. On the other, it increases exposure to compliance failures, intellectual property risks, and regulatory scrutiny.

cpd-Anekanta-AI-GenAI-can-surface-hidden-insights
GenAI can surface hidden insights

Proportionate AI Governance: Aligning Oversight with Risk

Boards must ensure AI governance is proportionate to the risk profile of each AI application. One-size-fits-all governance does not work.

For example:

  • AI for back-office automation (e.g., workflow optimisation, chatbots) presents lower risks and may require only operational oversight.
  • AI for decision-making (e.g., risk analysis, financial fraud detection) has higher stakes and requires greater board scrutiny to ensure transparency, fairness, and accountability.
  • GenAI for knowledge generation (e.g., AI-driven report summarisation, research synthesis) poses the greatest risk if data governance is weak, requiring board-level oversight to prevent data leaks, regulatory breaches, or inaccurate insights shaping business strategy.
  • Boards must set governance expectations that reflect the specific risks associated with different AI applications rather than treating AI as a monolithic technology.

Why AI Must Be a Standing Board Agenda Item

Embedding AI as a recurring agenda item ensures it remains aligned with corporate strategy, risk appetite, and regulatory developments. Boards must take a proactive approach to AI governance by:

 

  • Building AI literacy at the board level – Ensuring directors understand AI’s business implications and regulatory requirements.
  • Defining AI’s role in corporate strategy – AI should enhance competitive advantage, not dictate business decisions without oversight.
  • Ensuring AI risk management is robust – Boards must oversee compliance with evolving regulations such as the EU AI Act and ISO/IEC 42001.
  • Strengthening AI data governance – Given GenAI’s ability to extract and recombine information, boards must reinforce data protection policies to prevent sensitive or proprietary data exposure.
  • Continuously adapting AI governance – AI capabilities and regulations evolve rapidly—governance must keep pace.

Boards Must Equip Themselves to Drive AI Success

AI is not just another enterprise technology it is reshaping how businesses make decisions, manage risk, and drive innovation. AI literacy and governance must be board priorities to ensure AI is leveraged effectively, safely, and in alignment with business objectives.

Boards that plan for AI success and concurrently embed proactive AI governance will position their organisations for sustainable, AI-driven growth balancing innovation with control, opportunity with risk, and automation with accountability.

AI is not just transforming industries it is transforming governance itself. Boards that engage with AI at a strategic level will drive more informed decisions, enhance trust, and ensure AI serves the organisation’s long-term competitiveness and success.

Building board-level AI literacy is now an essential aspect of corporate governance. As AI capabilities evolve and regulatory expectations increase, boards must ensure they have the knowledge and frameworks to govern AI effectively. By embedding AI literacy into board discussions and strategic planning, organisations can position themselves for responsible, competitive, and sustainable AI adoption.

We hope this article was helpful. For more information from Anekanta AI and Anekanta Consulting, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.

References

  • British Standards Institute (BSI) 2025, ‘ISO 42001 – AI Management System Standard’ Available At: https://www.bsigroup.com/en-GB/products-and-services/standards/iso-42001-ai-management-system/ (Accessed: 20 March 2025)
  • EU AI Act – Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence and amending Regulations (EC) No 300/2008, (EU) No 167/2013, (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1139 and (EU) 2019/2144 and Directives 2014/90/EU, (EU) 2016/797 and (EU) 2020/1828 (Artificial Intelligence Act) OJ L, 2024/1689 Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202401689 (Accessed: 20 March 2025)