This informal CPD article, ‘AI Literacy for Boards – A Critical Skill for Business Leaders’, 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.
AI has become a core strategic concern for business leaders worldwide. It offers significant opportunities for efficiency, innovation, and competitive advantage but also introduces challenges that require informed oversight. To govern AI effectively, boards and executives must develop a foundational understanding of AI, ensuring its responsible deployment in alignment with business strategy, regulatory requirements, and de facto standards.
The EU AI Act [1] explicitly recognises AI literacy as a requirement under Article 4, mandating that providers and deployers of AI systems ensure that their staff and relevant stakeholders achieve a sufficient level of training. This means organisations using AI must equip decision-makers with the knowledge necessary to understand AI’s capabilities, limitations, and risks - not just from a technical standpoint but also in terms of business impact, regulatory obligations, and societal implications.
However, many AI training programs are inadequate for business leaders. Generic AI courses often lack industry context and fail to provide the practical knowledge necessary for decision-making in a corporate environment. To make informed strategic decisions, board members and senior executives require business-relevant AI education tailored to governance, risk management, and regulatory compliance.
What is AI Literacy?
AI is increasingly embedded in corporate decision-making, from automated financial analysis to risk assessment and HR processes. Without a clear understanding of AI’s capabilities and risks, business leaders cannot effectively oversee AI-driven strategies or ensure compliance with evolving regulatory frameworks.
AI literacy refers to the skills, knowledge, and understanding that allow individuals to make informed decisions about AI deployment while being aware of both its opportunities and risks.
For business leaders, AI literacy includes:
- Understanding AI’s role in business strategy – How AI can enhance operations, decision-making, and competitiveness.
- Recognising AI limitations – Awareness of bias, data quality and accuracy challenges, and the need for human oversight.
- Interpreting AI system outputs – Knowing how AI-driven decisions impact business processes and external stakeholders.
- Compliance with AI regulations – Ensuring AI adoption aligns with laws such as the EU AI Act, and follows certifiable standards for example, ISO/IEC 42001, and global OECD AI Principles.
AI literacy ensures that boards and executives are not solely reliant on technical teams but are actively involved in shaping responsible AI strategy and adoption within their organisations.
AI governance establishes organisational policies
AI Literacy and Governance – Complementary but Distinct Concepts
AI literacy and AI governance are not the same, but they are closely connected. AI governance establishes organisational policies and oversight mechanisms to ensure AI is developed and used responsibly.
AI literacy enables business leaders to implement AI adoption strategies effectively, by ensuring they:
- Understand AI’s business opportunities and constraints.
- Can critically assess AI strategies and vendor claims.
- Recognise compliance requirements and strategic risk.
Without AI literacy, even the most well-designed governance frameworks may be ineffective, as decision-makers will lack the knowledge required to enforce policies or identify potential AI-related risks.
Why CPD-Certified AI Literacy Training is Essential
AI literacy training must be practical, business-focused, and addresses real-world business challenges. AI literacy is now a legal requirement under Article 4 of the EU AI Act and a business necessity for organisations leveraging AI. Business leaders must understand how AI impacts strategy, compliance, and governance, ensuring they are equipped to lead AI adoption for the maximum extent possible while minimising risk and harms.
AI literacy is not just about technical understanding - it is about making informed business decisions, ensuring AI is used effectively while managing risks. Without it, unintended consequences may emerge:
- Regulatory breaches
- Flawed AI strategies
- Competitive disadvantages
- Reputational harm
CPD-certified AI literacy training provides business leaders with the credibility, expertise, and practical knowledge required to govern AI effectively. Organisations that invest in AI literacy will be better positioned to leverage AI for innovation, ensure compliance, and maintain a leadership position in an AI-driven economy.
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
- [1] 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) (Text with EEA relevance)
- 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/
- Organisation for Economic Cooperation and Development (OECD) 2024, ‘AI Principles’ Available at: https://www.oecd.org/en/topics/ai-principles.html Accessed: 24 February 2025
