AI in the Boardroom: Bridging Hesitation and Opportunity

The past year has brought dramatic change to how boards view artificial intelligence. Since co-authoring the Athena Alliance AI Playbook for Boards with fellow directors and executives, I've watched AI transform from an emerging technology topic to a central governance focus. Yet, there's been surprisingly little focus on how boards themselves might use AI to enhance their own practices.

The reluctance to use AI inside boardrooms feels increasingly out of step with broader organizational trends. Management teams routinely rely on AI to prepare board materials, legal advisors use it for drafting contracts and analyzing regulations, and compliance departments deploy it for monitoring risks.

However, once directors enter the boardroom itself, many revert to traditional methods as though AI doesn't exist. Many directors are warned against uploading sensitive materials into AI tools or using AI note-taking assistants. Some boardrooms have banned AI outright due to privacy and security concerns and their legal and business consequences.

This disconnect is striking given the growing demands placed on directors. Board materials are becoming more voluminous and complex, regulatory requirements are multiplying, stakeholder expectations are rising, and emerging technologies like AI add layers of oversight responsibility. Directors need AI with the right guardrails that help them focus on what's most important for decision-making rather than getting lost in minutiae.

In my conversations with board members across industries, I find they consistently return to a fundamental question: Does AI use in the boardroom help or hinder directors in fulfilling their fiduciary duties?

This question must be examined through the lens of directors' core responsibilities — their duty of care and duty of loyalty. Does AI make directors better informed without diminishing their scrutiny? Can it enhance alignment with stakeholder interests without introducing bias?

The Artificially Intelligent Boardroom paper in Stanford's Closer Look Series highlights how carefully boards must navigate these questions to avoid undermining their role. Their research identifies four key areas poised for AI impact: how boards function, how they process information, how boards interact with management (and vice versa), and how board advisors contribute.

Corporate governance rests on a delicate balance: management runs the company, while the board oversees management's actions on behalf of shareholders. Historically, boards fulfill their duty of care if they are reasonably informed and make decisions in good faith based on available information provided by management. Today's information environment makes this increasingly challenging.

AI offers potential solutions. Tools like Equilar's ERIC or Diligent's governance platforms can summarize complex documents, identify anomalies across reporting periods, and provide predictive analyses beyond historical data. These capabilities could transform boards from reactive to proactive in their oversight.

Where AI Shows Promise in Board Work

Here are a few areas where some boards are actively experimenting with responsible use of AI:

• Material enhancement: Summarizing lengthy board materials without losing key insights, highlighting narrative changes between reporting periods, and identifying trends or anomalies across financial reports.
• Knowledge augmentation: Offering real-time explanations of regulations or financial metrics, retrieving relevant historical decisions, and fact-checking statements.
• Process improvement: Suggesting oversight questions based on gaps in materials, tracking follow-up actions, and surfacing risks using targeted analytics.
• Engagement enhancement: Prompting boards to explore neglected areas or consider more diverse perspectives in discussions.

In specialized boards such as mutual fund boards, AI might transform processes like 15c contract reviews. Instead of relying solely on consultants, AI systems could deliver real-time comparative analyses between advisers and sub-advisers.

Valid Concerns That Demand Attention

Despite the opportunities, there are legitimate concerns:

• Judgment and accountability: Can directors truly outsource even part of their judgment and still fulfill their fiduciary role?
• Loss of nuance: Directors often detect subtle inconsistencies or risks. Can AI reliably preserve these insights?
• Information overload: Ironically, while AI reduces asymmetry, it could increase volume and preparation demands.
• Security and privacy: The risk of exposure of sensitive data remains high.
• Governance boundaries: With more access to operational data, directors could unintentionally cross into management territory.
• Model trust and transparency: Predictive models must be auditable to avoid harmful decisions based on unreliable forecasts.

Encouragingly, many of these concerns are being addressed. Techniques like Retrieval Augmented Generation (RAG) and domain-specific fine-tuning now ground AI responses in accurate, relevant documents. On-premises deployments and enterprise-grade access controls also reduce data exposure risks.

More Creative Uses in the Boardroom

• Committee-specific AI assistants: Tools that tailor output to an individual director's role and expertise.
• Contrasting AI agents: Multiple models trained on different risk profiles to simulate debate and test assumptions.
• AI-ready content: Supplemental materials designed for machine consumption that enhance internal intelligence.

Practical First Steps

• Begin with non-sensitive applications using public data.
• Develop explicit policies on what materials can be processed.
• Focus on tools that augment, not automate, director judgment.
• Apply rigorous security protocols.
• Continually evaluate governance risks and effectiveness.

Preserving the Art of Governance

My thinking on boardroom AI has evolved. What once felt like an efficiency boost now feels like a foundational governance decision. Boards that adopt AI thoughtfully — while preserving the irreplaceable value of human oversight — are likely to emerge stronger.

The boardroom of tomorrow won't be AI-free, but it also shouldn't surrender its defining responsibility: independent, informed human judgment on behalf of those it serves.