What boards still need to get right on AI
During a recent visit to Australia, Dottie Schindlinger, Executive Director of the Diligent Institute, shared her thoughts on how boards are grappling with the opportunities and risks created by AI. From governance and ROI to cyber risk and the use of AI tools in the boardroom itself, Schindlinger shared her perspective on why directors need a clearer view of how the technology is being adopted and overseen.
Q: Why are boards under more pressure now than they were even a few years ago?
Boards are dealing with a convergence of pressures. There is technological disruption, especially around AI and cyber risk, but there is also broader geopolitical instability and economic uncertainty. What I have heard consistently, including here in Australia, is that directors are spending more time on board work and finding it more demanding. Governance has expanded well beyond financial oversight and compliance.
Directors are now expected to understand fast-moving technologies and their implications for strategy, risk and competitive advantage. In practice, that means boards are taking a more structured approach to AI, asking management to be clear about where it is being used, what risks it introduces, and how those risks are governed at an enterprise level.
Q: What makes AI different from the other major issues boards have had to absorb?
AI presents two challenges at once. The first is the governance of AI: how the company is adopting it, where it is creating value, and the risks it entails. The second is AI in governance itself: how boards and governance teams are using these tools in their own work. What makes AI especially challenging is the pace. Boards may approve an AI strategy, but many still do not feel they have a clear line of sight on ROI, and the technology is evolving so quickly that the target keeps moving.
Q: Where are Australian organisations in their AI journey right now?
Many are still at an early stage. A lot of organisations are thinking about AI primarily in terms of efficiency, productivity and incremental growth. They are not yet always thinking about how AI could fundamentally reinvent their business model or reshape how they deliver products and services. That is understandable, but boards need to recognise that AI is increasingly becoming a strategic issue, not just an operational one.
Our research reflects this. While many Australian boards have put AI on the agenda, only around a third have undertaken a formal audit of how AI is already being used across their organisation. That lack of visibility makes it harder for boards to have meaningful strategic and risk conversations about AI.
Q: Are boards underestimating the risks of using public AI tools?
In some cases, yes. One of the concerns I have repeatedly raised is that some directors may be using free, public AI tools to help prepare for meetings. Even if they are not intentionally sharing sensitive material, the risk remains. Boards need secure, purpose-built tools, clear policies around acceptable use, and training so everyone understands both the benefits and the boundaries.
Q: Do boards need to change their composition to deal with AI?
Not every board needs to be rebuilt, but every board does need greater AI fluency. We cannot simply add a new director every time a new issue appears. At the same time, the absence of meaningful digital or AI expertise in the leadership mix could become a liability, especially for companies pursuing AI-led transformation. The key is making sure the board can ask informed questions and exercise credible oversight.
Over the next 12 months, what I think we will see is less emphasis on headline AI appointments and more attention on upskilling, education and practical exposure. Boards are starting to recognise that AI literacy needs to be shared across the table, rather than being concentrated in a single individual.
Q: What should boards do first if they are still early in this process?
Start with three things. First, do an audit to understand where AI is already being used across the organisation. Second, select the right tools and set clear policies that align with your company’s regulatory and operational context. Third, invest in training at every level, from frontline staff to the boardroom. That is not the end of the work, but it is the right place to begin.
Q: What is the mindset boards need now?
Curiosity, urgency and humility. This is not a fad, and it is not something boards can delegate away. AI is moving quickly, and governance must keep pace. The boards that do best will be the ones that keep learning, keep asking better questions, and treat governance as something that must evolve alongside the technology.
I’ve spent over 25 years helping boards and executives make better decisions through smarter governance. Today, that means tackling the questions keeping directors up at night: How should boards oversee AI? What does effective cyber risk governance actually look like? How do you modernize governance without losing sight of what makes it work?
As Executive Director of the Diligent Institute, the global governance research arm of Diligent Corporation, I lead research and thought leadership on governance, AI, cybersecurity, and the evolving role of the board. Our work has been featured in Fortune, Forbes, The Wall Street Journal, and Bloomberg.
