Using AI in the Boardroom—New Opportunities and Challenges

All boards are different, but there are three critical assets that great boards possess to contribute to their effectiveness. First, they have deep and varied experiences that enhance their business judgment. Second, they take a long-term, enterprisewide approach to evaluating the success of the business. Third, they work closely with management, but they maintain their oversight role and one-step separation from the daily operations of the business so they can provide perspective and ask challenging questions about strategy.

AI can significantly enhance those critical functions of the board by addressing the longstanding issue of information asymmetry between boards and management. At the same time AI capabilities offer opportunities for boards, the technology can raise new risks that boards and management should anticipate and address together.

The agency problem potentially disrupted by AI

Today, the board receives nearly all of its information from the management team. While most management teams are diligent in providing data and promptly responding to board inquiries, at times the information may lack certain context or alternative perspectives which can limit the board’s ability to access the full picture for decision-making. These arrangements inherently create an agency problem as the board depends on its information from the very management team it is tasked with overseeing, potentially compromising its ability to exercise independent judgment and oversight.

AI has the potential to fundamentally change this dynamic. Directors can use AI to more easily and quickly benchmark public disclosures and query market data, providing an independent baseline to compare against what management presents. They can also apply AI to analyze the company’s own historical, management-curated data that has been provided to the board in board packages or other communications, enabling longitudinal views of performance that might not otherwise be synthesized for the board. More advanced applications of AI could allow directors to pressure-test strategy, blending both public and private information to evaluate assumptions or identify risks. As we look ahead, AI could be a catalyst to empower directors to request and analyze new datasets not previously shared by management—running benchmarking exercises, scenario plans, or hypothetical analyses that extend beyond the traditional board pack. Together, the capabilities of AI suggest an opportunity and future in which the board can more easily obtain information to formulate better questions and engage in more robust discussions with their management teams.

AI use, while beneficial, brings new risks

As board members begin to expand their use of AI in the boardroom to perform their fiduciary responsibilities, they will likely have questions about how to responsibly use AI as well as the related legal and other risks. Management teams should develop new ways to address the changed information flow between the board and them. And legal advisors should facilitate these discussions and develop procedures that both support strategic AI use in the boardroom, while mitigating legal liability. All of these changes will have implications for board culture, process, and trust, and should be approached thoughtfully.

Here are some key risks that are important to keep in mind:

• Board overreach: Using AI to more easily summarize and analyze independent information could invite boards to step over the oversight boundary and engage in functions that should be driven by management.
• AI hallucinations: AI-generated outputs may contain errors or biases that appear credible, underscoring the need for directors to verify information and use human judgment before relying on them in decision-making.
• Data security: Making sure directors only use AI within secure, company-approved environments for board work, or they risk exposing sensitive data and undermining proper recordkeeping of board activities.
• AI creates a written record: Free-flowing inquiry by board members using AI can lead to dead-end paths on the way to insight. Managing how the written record from AI prompts are created and retained will be important to prevent regulators, activists, or plaintiffs’ lawyers from cherry-picking the record and applying hindsight to create false narratives.

Since directors are already starting to make use of AI in various ways—35% of directors are saying their boards have incorporated AI and GenAI into their oversight roles—these risks need to be addressed. While it is unwise for any company to dive headlong into a highly AI-enabled board process, the right questions to ask are about how fast to move and the impact on board processes. Doing nothing—or moving too slow—may bring more risk than a smart introduction of AI, phased in over time.

Boards are starting to explore the use of AI in the boardroom

35% of directors say their boards have incorporated AI and GenAI into their oversight roles. Here are the ways they are using it:

• Staying informed on emerging trends
• Researching or benchmarking peer practices
• Evaluating company performance metrics
• Enhancing governance processes (e.g. meeting preparation and agendasetting)
• Pressure testing corporate strategy (e.g. scenario modeling)

Q: How is your board currently using AI and GenAI in its oversight role? (select all that apply)

Base: 556

Source: PwC, 2025 Annual Corporate Directors Survey, October 2025.

A proactive governance approach for board use of AI

To responsibly integrate AI into board processes and workflows, the board should consider adopting a proactive governance framework developed collaboratively with the CEO and management that guides its use and drives alignment with the board’s oversight responsibilities. The framework should also be informed by key stakeholders, including the general counsel, corporate secretary, and other legal and risk advisors. Augmenting board processes through AI is a big change. It needs to be done in a way that the CEO and senior leadership team, as well as the board, support. Establishing clear protocols as to how and when AI is used by the board—and how its outputs will be interpreted and documented—will help mitigate potential risks, while helping the board to realize the full benefits of this transformative technology

• Put AI use in the boardroom on the agenda: Boards should formally include AI use as an agenda item to facilitate thoughtful discussion about how directors are currently leveraging AI to support their fiduciary responsibilities—and how they envision its use evolving over time. This discussion might include whether AI will be used for generating queries, performing scenario modeling, drafting minutes, or even serving as a virtual observer during meetings. It is important for senior management and the board to align on both the intended use cases and the pace of adoption. Boards can also consider adopting a formal AI policy that aligns with the company’s broader AI policies but is tailored to reflect the board’s unique responsibilities and oversight role. Additionally, regularly sharing how individual directors are engaging with AI, and what types of insights they are receiving, promotes transparency and consistency. Some directors may be early adopters of AI tools, while others may prefer to observe initial usage and adopt at a slower pace.
• Commit to upskilling: Directors should proactively enhance their AI literacy to more effectively use and oversee AI-related matters. This includes participating in targeted education sessions, understanding the company’s specific AI policies, and addressing AI risks and opportunities.
• Enable secure AI use: Any board-related use of AI should occur within a secure, company-approved environment. Directors should not put board packages and company information into public or personal AI platforms as these may expose sensitive data to unnecessary risk. Use of personal or public platforms also can create significant issues in the tracking and documentation of the board’s activities.
• Maintain human oversight: AI-generated insights can be valuable, but they should be subject to critical human review. Outputs from AI carry the risk of inaccuracies or ‘hallucinations,’ or outputs that sound plausible but lack factual basis. There should always be ‘humans in the loop,’ meaning a human should review for more accuracy and offer appropriate critique and perspective on AI outputs. Decision-making should consistently remain with directors and the members of the senior leadership team who also have fiduciary obligations to the company.
• Have a plan to address discrepancies between AI-generated information and management information: There could be times when directors have identified information or analysis generated by AI that differs from what management has provided. It is important to have a proactive process in place to address these differences, ideally in advance of board meetings. The process can include establishing protocols for when and how board members share AI-derived insights with a designated management contact responsible for coordinating internal follow-up as well as guidance for when to escalate the discussion to the board chair or relevant committee chair. The goal is to realize the value of AI in board processes and workflows, while making sure AI remains a technology tool, and that the central relationship for strategy remains between the board and management.
• Recognize board prompts and AI-generated outputs may be retained: Prompts and AI-generated outputs should remain behind the company’s data firewalls. General counsel and legal advisors should consider whether—and to what extent—AI use and prompts by directors should be reviewed by management and aligned with the appropriate record retention policy.
• Prepare for investor transparency: As AI becomes a more prominent tool in board decision-making, investors may begin to ask how it is being used in governance processes. The board should be prepared to articulate its approach, including how AI informs oversight.
• Evolve the board’s AI approach over time: AI integration should not be static. Boards should periodically revisit their AI practices, and adjust as technology, risks, and opportunities evolve. Continuous improvement—including identifying new, responsible ways to leverage AI—will help make sure the board’s approach remains relevant and effective.

In conclusion

There is no one-size-fits-all approach to integrating AI into board governance. But boards and management teams should begin the conversation now—before a pressing issue demands it. Establishing clear, collaborative processes for how AI will support board oversight can enhance effectiveness. By thoughtfully addressing the agency problem and enabling more informed, independent board dialogue, AI has the potential to strengthen governance and reinforce the partnership between boards and management.

1While AI is being used in real-world applications, human judgment is essential for managing, reviewing, and overseeing AI systems and their outcomes. (go back)

2Corporate Board Member and Diligent, “New Survey Reveals What Keeps GCs Up at Night,” Corporate Board Member, accessed October 27, 2025. (go back)