The Rise of AI in the Modern Business World: Why It's No Longer Optional

AI is No Longer Optional

AI is No Longer Optional

Artificial intelligence (AI) is transforming industries at an unprecedented pace, and its governance has become a crucial concern for corporate boards. Despite AI's growing influence, a significant portion of boards have yet to integrate AI discussions into their strategic agendas. The Deloitte Global Boardroom Program survey found that 45% of board members reported AI was not yet on their agenda.

"45% of Board Members say AI was not on their agenda. "

-Deloitte Global Boardroom Program 2025

The Growing Importance of AI Governance in the Boardroom

The rise of AI and generative AI (gen AI) is reshaping corporate strategy, yet many boards are lagging in their oversight responsibilities. While AI presents significant opportunities, it also introduces new risks, requiring a governance model that ensures transparency, ethics, and compliance.

Deloitte’s survey of nearly 500 board members across 57 countries revealed that AI governance remains a low priority in many boardrooms. Only 14% of respondents stated that AI was discussed at every board meeting, while nearly half reported that AI had never been on their board’s agenda.

Scaling Up Board Engagement in AI Oversight

AI is increasingly becoming a strategic asset for organizations, yet many boards are still in the early stages of AI oversight. A key challenge is the lack of AI literacy among board members. The survey found that 79% of boards had limited or no knowledge of AI, highlighting an urgent need for education and engagement.

To address this, boards should:

• 1. Increase AI-related discussions at meetings.

• 2. Invest in AI education and training for board members.

• 3. Collaborate with AI experts to understand emerging trends.

• 4. Ensure AI governance aligns with corporate objectives and risk management frameworks.

Challenges in AI Adoption and Strategic Implementation

While organizations are eager to implement AI, scaling AI initiatives effectively remains a challenge. PwC's "State of Generative AI" 2025 report highlights that many AI initiatives are still in the pilot stage, with organizations struggling to transition from experimentation to full-scale deployment.

Key challenges include:

• 1. Lack of AI fluency among executives and employees.

• 2. Data management issues limiting AI effectiveness.

• 3. Resistance to change and low adoption rates among employees.

Overcoming these barriers requires strong leadership, cross-functional collaboration, and a clear AI strategy that integrates data governance and change management initiatives.

Near-Term AI Use Cases: Productivity and Efficiency

AI adoption is primarily focused on enhancing productivity and operational efficiency. According to the survey, 66% of organizations use AI to improve efficiency, while 50% leverage AI to enhance customer experience. Other strategic AI applications include developing new products and optimizing business processes.

Despite the growing focus on AI, only 4% of organizations have fully integrated AI into their business and operational plans. To accelerate adoption, boards must establish clear AI priorities and ensure that AI investments align with organizational goals.

Building an AI Governance Model: Key Considerations

Effective AI governance requires a structured approach to oversight, risk management, and stakeholder engagement. Deloitte’s research suggests that boards should focus on:

1. 1. Defining Board Responsibilities

   1. - Establish AI governance as a core board function.

   2. - Determine whether AI oversight should be handled by the full board or a specific committee (e.g., risk, audit, or technology committees).

2. 2. Identifying Key Stakeholders

   • - Customers (73%) and employees (69%) are considered the most important stakeholders in AI governance.

   • - Shareholders, regulators, and suppliers also play crucial roles in shaping AI policies.

3. 3. Implementing AI Risk Management Strategies

   • Ensure AI ethics and regulatory compliance.

   • Monitor AI-related risks, including data privacy, bias, and cybersecurity threats.

   • Establish guidelines for responsible AI usage within the organization.

Steps Boards Can Take Now to Strengthen AI Oversight

To effectively govern AI, boards must take immediate action by integrating AI discussions into their strategic planning. Key steps include:

1. Put AI on the Board Agenda

   • Regularly discuss AI strategy, risks, and opportunities.

   • Hold special AI-focused sessions and workshops.

   • Engage with management to understand AI’s impact on business operations.

2. Define a Clear Governance Structure

   • Assign AI oversight responsibilities to the appropriate board committee.

   • Ensure AI-related risks are addressed in corporate risk management frameworks.

3. Enhance AI Literacy

   • Provide AI training for board members.

   • Invite AI experts and industry leaders for discussions.

   • Encourage hands-on experience with AI technologies.

4. Monitor AI Implementation and Progress

   1. Set clear KPIs for AI adoption and governance.

   2. Conduct regular assessments to track AI’s impact on business performance.

   3. Align AI investments with long-term business objectives.

   
   

Conclusion

AI governance is no longer optional—it is a critical imperative for today’s boards. As AI continues to evolve, boards must proactively engage in AI oversight, enhance their knowledge, and establish governance models that ensure ethical, responsible, and effective AI deployment.

By taking decisive action now, boards can position their organizations to harness AI’s transformative potential while mitigating associated risks, ensuring long-term business success in an AI-driven world.

Peter Toumbourou

Instant.Accountants