From awareness to accountability: How boards are approaching AI oversight

Artificial intelligence (AI) is not only a technology question for the board. It is a matter of business model, workforce, intellectual property, compliance, risk and competitiveness for the board and leadership. As AI increasingly influences how tasks are executed, how services are delivered, how stakeholders are engaged and how decisions are made, its implications are becoming more relevant to board oversight and AI governance.

AI has become more relevant not because directors need to understand the technology itself, but because AI systems are now core responsibilities to many boards, from strategy to risk and compliance oversight. Findings from Nasdaq’s 3rd Annual Global Governance Pulse survey reflect that shift, with 40percent of respondents indicating AI and machine learning will be among the top issues affecting their organizations this year, up from 19 percent in 2024.

At a practical level, AI governance requires a clear framework, defined policies, and integrated processes that help the board oversee AI risks, compliance obligations and ethical expectations across the organization.

How AI discussion at the board level is evolving

As AI becomes more embedded throughout organizations, it is increasingly reshaping board responsibilities and what is necessary for informed board dialogue, making board-level engagement increasingly important. That engagement, however, is not keeping pace with organizations’ growing use of AI within numerous aspects of the business.

Board-level discussion of AI is gaining ground, but there is significant opportunity to have it be widespread enough to reflect a structured AI governance framework with clear policies and reporting. Based on Governance Pulse survey findings, nearly 20 percent of boards are not discussing AI at all, despite its increasing organizational impact. Among those who are, 77 percent are approaching it primarily through a business lens, focused on productivity, expansion and disruption.

Beyond simply placing AI on the board agenda, the next step is ensuring board engagement evolves into AI governance that is structured, informed and aligned with broader oversight responsibilities, including ethical use and compliance. The opportunity for boards is to define effective oversight in a comprehensive, clear and consistent manner. They should consider ensuring the business use of AI is integrated into strategic planning, defining whether a committee owns routine monitoring, determining how significant reports and dialogue reach the board as well as establishing parameters around how management escalates issues tied to AI systems, data and emerging regulations.

What effective AI oversight asks of boards

Another clear sign that AI is reshaping boardrooms is based on how boards are rethinking composition. According to findings from the Governance Pulse survey, 45 percent of respondents identified AI and machine learning as the most important skills to enhance board composition, making it the top priority and marking a 10 percent increase from 2024. Additionally, AI was the top topic for board education selected by 50 percent of respondents, which almost doubled from its ranking in 2024.

These findings reflect more than a board recruitment preference. It suggests that boards increasingly understand effective AI oversight depends, at least in part, on having enough fluency in the boardroom to ask better questions, challenge assumptions and assess whether management’s approach is aligned with the organization’s strategy and risk tolerance. While directors do not necessarily need to be technical experts in AI, it is important that they have an understanding of how AI systems, models and data work to exercise credible judgment as the technology becomes more embedded in organizational decision-making and operations.

The work ahead for boards is premised on both understanding whether AI matters and determining how to govern it well. That may mean adding directors with relevant expertise, strengthening education programs and firsthand opportunities to understand the AI tools and clarifying how AI oversight connects to broader discussions about enterprise risk management, innovation and organizational performance.

From AI awareness to more structured governance

The Governance Pulse survey findings suggest that boards are paying more attention to AI, but their approach to governance remains uneven. As AI becomes more consequential to business performance, risk oversight and sustainable growth, the next step for boards is not simply continued discussion but more deliberate oversight. That means moving beyond ad hoc engagement and beginning to build the composition, fluency, and accountability needed to govern AI in a way that is practical, informed and aligned with the board’s broader oversight responsibilities.

Beyond building expertise and governance frameworks, boards are also beginning to consider how AI can support their work more directly. This is reflected in a growing focus on better access to key information and clearer visibility into board-level decisions.

As boards bring more structure to AI governance, the tools supporting that work also matter. Nasdaq Boardvantage AI is designed to help bring responsible AI into the boardroom in a way that supports informed decision-making, oversight, and overall board effectiveness, built with security, privacy, and responsible AI use in mind. Learn more about Nasdaq Boardvantage AI.