The Board’s Role in AI Governance: What CEOs and Directors Need to Know

"Board members tend to read something in the Wall Street Journal, show up at a board meeting, and ask 'Have you thought about AI?'"

This observation from an executive perfectly captures the awkward dance happening in boardrooms around AI strategy. The tension is palpable: board members feel they should provide oversight but aren't sure what questions to ask. Meanwhile, executive teams—still figuring out their own AI approaches—can't turn to boards for guidance and aren't eager to share incomplete plans.

The result? A governance gap during the most transformative technology shift in decades.

I see this problem from both sides. Executives tell me, "My board doesn't know enough about AI to provide meaningful guidance." Board members confide, "I know I should be asking about AI, but I'm not sure what to ask beyond 'Are we doing something?'"

This disconnect means organizations aren't having the strategic conversations they need about how AI aligns with long-term objectives and values.

The AI Governance Ecosystem

When I work with organizations on AI governance, I typically see four interconnected components:

1. First, there's the AI Council—a small group tasked with setting strategy and ensuring alignment with business goals. This isn't a technical committee; it's a strategic one with representation from across the executive team. 

2. Second, there are quarterly reviews structured as what I call a "six-quarter walk." Every three months, teams assess progress against an 18-month roadmap, asking: Did we achieve what we planned? Where are we ahead or behind? What assumptions have changed?

3. Third, there's an ethics function ensuring AI applications align with organizational values. Even with good intentions, AI can create unintended consequences. This group protects long-term values and reputation by identifying risks others might miss.

4. Finally, there's the board, which sits atop this ecosystem—not to dictate technical decisions but to ask questions that shape how the other elements function.

Three Dimensions of Board Oversight for AI

Board oversight can be organized into three dimensions that mirror broader board responsibilities:

1️⃣ Strategy and structure

Here, the board ensures AI initiatives serve organizational priorities and competitive positioning. They're weighing short-term gains against long-term success, making sure AI investments build sustainable advantage rather than chasing trends.

In this dimension, directors ask questions like: How does our AI strategy support our overall business objectives? How is our AI Council structured? How are we measuring strategic impact? These questions aren't about technical details—they're about alignment and purpose.

2️⃣ Risk and accountability

Boards don't eliminate all risks—that's impossible—but ensure risks are systematically identified and managed. I worked with one board that was initially focused on eliminating all AI risks until they realized their role was to confirm that someone was accountable for assessing and mitigating those risks.

This dimension leads to questions about unique AI risks, ethics function independence, escalation processes, and metrics that track both progress and potential issues. One director beautifully articulated this balance: "Our job isn't to slow down innovation—it's to make sure innovation happens on a foundation that can support its weight."

3️⃣ Organizational readiness 

The board confirms that the right talent, culture, and resources exist to support AI transformation. This includes workforce preparation, cultural evolution, and trust maintenance across stakeholders.

I worked with a board that initially focused exclusively on AI technology investments until they realized their organization lacked the talent and culture to implement them effectively. Their oversight shifted to ensuring these foundational elements were in place before approving further technical investments.

Bridging the Governance Gap

To close this gap between boards and leadership teams, both sides need new approaches.

▶️ For executive teams: Provide quarterly landscape updates that go beyond technical details. One board member shared: "At each quarterly meeting, we get a streamlined update on what's changing in our AI landscape. This keeps us connected without getting into the weeds."

Focus these updates on how AI developments affect strategic goals and long-term success. Make these discussions a regular part of every board meeting, not just when directors specifically request them.

▶️ For board members: Develop independent AI literacy rather than relying solely on executive updates. Another director candidly noted: "The most dangerous boardroom assumption is that the executive team will take care of keeping you informed about AI."

This doesn't mean becoming technical experts. One board I know requires each director to bring something they've learned about AI to their pre-meeting dinner. This creates a learning culture while acknowledging that their role isn't technical mastery.

Board education can take many forms: setting expectations for AI literacy, incorporating learning into the board calendar, establishing external expert resources, or tapping peer networks. The key is taking ownership of this education rather than outsourcing it entirely to the executive team.

The Path Forward

The most effective boards recognize that they aren't technical AI experts—nor should they be. 

When I ask executives what they most need from their boards regarding AI, they rarely mention technical expertise. Instead, they want boards that ask thoughtful, strategic questions that help them clarify their own thinking. They want partners who understand AI's transformative potential without getting lost in technical details.

For executives, this means preparing your board for strategic discussion through regular updates and education. For directors, it means taking responsibility for your AI literacy while staying focused on strategic alignment rather than technical implementation.

Organizations that bridge this governance gap gain a significant advantage in navigating both the opportunities and risks AI presents in the coming years.

Your Turn

If you're an executive, how are you preparing your board to be a strategic ally in your AI journey? If you're a board member, what steps are you taking to develop AI literacy and ensure that the organization is taking a strategic approach to AI?

If this information was helpful, there’s plenty more!

📌 Don't miss my upcoming (free!) webinar 
"Using AI as a Leader: A Practical Guide for Executives" on Thursday, April 24 at 11am PT/2pm ET. In this hour-long session, I'll share the Cliff's Notes version of what you actually need to know about leveraging AI as a leader.

This webinar cuts through the hype and equips you with: 

👉A foundational understanding of predictive, generative, and agentic AI

👉A framework to connect AI initiatives to your business strategy

👉Key questions every leader should ask to focus their AI efforts

👉The confidence to lead AI conversations across your organization

Whether you're just getting started or looking to sharpen your direction, you'll walk away with practical frameworks and a clear roadmap for making AI work for your business.

Are you ready to lead confidently with AI? Register now to secure your spot!

📌 Take my latest LinkedIn Courses! 

→ “The Manager's Guide to Integrating and Managing AI Agents." In this brand-new course, I offer practical approaches for effectively managing both AI agents and human employees as a unified team. Ready to lead with confidence? Get the course here.

→ "Transforming Business with AI Agents: Autonomous Efficiency and Decision-Making." I provide a comprehensive introduction to autonomous AI agents, explaining how they differ from other AI products, boost productivity, and enhance decision-making while addressing key ethical considerations. Explore the course here.

→ You can also review the slides and recordings of two of my all-time favorites, “Unlocking The Power of Generative AI,” and “Developing a Winning Generative AI Strategy for Competitive Advantage.”

📌 Sign up for updates and early access to my upcoming book, co-authored with Katia Walsh, which is all about creating a winning AI strategy.

What I Can’t Stop Talking About 

• The Two Hard (But Essential!) Conversations All Co-Founders MUST Have. Before discussing vision, funding, or go-to-market strategy with potential co-founders, insist on two talks: how you'll make decisions when you don't agree on something, and how you'll dissolve the partnership if needed. Planning for that possibility ensures the relationship remains intact regardless of business outcomes. Here's why getting clarity on endings helps you invest in beginnings.

• Shame Is A Sunk Cost. One CEO transformed his organization by declaring they would "never fail again"—not by avoiding mistakes, but by eliminating the emotional baggage that comes with failure. By separating shame from learning, they created a culture where people could objectively examine what went wrong without the crushing weight of feeling like failures themselves. Here's how this counterintuitive approach builds openness and innovation.

• The Perfect AI Assistant Is Coming (But Not How You Think!). Creating the ideal AI experience isn't about finding one magical tool—it's about orchestrating a symphony of specialized AIs working in harmony. Right now I'm manually connecting meeting recordings, email assistants, and content libraries, but the future belongs to hierarchical "uber agents" that will coordinate these tools seamlessly. Here's my current stack—and what I see coming next.

My Upcoming Appearances

• April 15: Health Plan Alliance Keynote, Dallas, TX

• May 6: PlanSource Eclipse, Keynote, Orlando, FL

• May 16: Private Executive Retreat, Portland, OR

• Jun 10: Betterworks Webinar, Virtual

• Aug 29: Indy SHRM, Indianapolis, IN

If you found this note helpful, please forward it and share it with someone who needs the inspiration today. If you were forwarded this, please consider subscribing.

If you found this note helpful, please forward and share it with someone who needs the inspiration today. If you were forwarded this, please consider subscribing.

Join me on Facebook, Instagram, LinkedIn, and Twitter.