“AI-driven.” “Gen-AI at scale.” “Digital twin synergy.” Every second earnings call sounds like a TED-Talk Mad Lib. Behind the slideware, though, most directors still treat artificial intelligence as a fashion trend. Try it on, flaunt it, and move to next season.
The numbers shred the façade. Only 14% of boards even discuss AI at every meeting, and 45% haven’t put it on the agenda once. McKinsey’s 2025 survey shows 78% of companies now deploy AI somewhere, yet a microscopic 1% call their gen-AI roll-outs “mature.”
Basically: everybody’s experimenting; almost nobody knows what they’re doing.
Buzzword bingo is costly
C-suites keep spending because they fear missing the next iPhone moment. Accenture found 86% of global executives plan to boost gen-AI budgets in 2025, but 26% of those dialing back cite “unclear ROI.” That gap between swagger and substance widens inside companies. Only 35% of employees say they actually understand AI’s value, versus 54% of executives. If the rank-and-file can’t see the point, the slide deck has replaced strategy.
The missing brains behind the buzz
Boardrooms love “governance,” yet the benches remain thin. Just 15% of S&P 500 companies disclose any AI oversight capabilities, and Deloitte’s 57-country poll shows almost 50% of directors admit AI still isn’t on their board agenda. And even when oversight does exist, it’s tends to be superficial. McKinsey notes only 17% of firms put AI governance in the board’s hands (Governance theatre, not stewardship).
Remember Zillow’s house-flipping face-plant? Their valuation model hallucinated itself into a $300 million crater and a 20% stock-price drop. Elsewhere, a bank board recently staged a drill where a voice-cloning model impersonated the CEO (Directors freaked when they learned the voice wasn’t real. Meanwhile, the AI Incident Database logged a 32% jump in reported failures last year. Hype without literacy multiplies risk.
Yet, the prize is real
McKinsey links CEO-level governance to the largest EBIT bump from gen-AI. Companies that redesign workflows and track hard KPIs tend to unlock actual value, while those who chase shiny demos burn capital. The talent crunch is a leadership vacuum, not a technology problem. MIT Sloan bluntly reports 61% of CIOs have less time for strategy because they’re buried in ops. Culture, not code, block progress: 91% of data chiefs blame “cultural challenges,” not tooling.
The boardroom to-do list for grownups
Put skin in the game. Add a director who has shipped an AI system (preferrably a complex one that spans multiple types of machine learning, not just generative tech), not another “digital” generalist.
Make AI a standing agenda item. If cyber gets 15 minutes every quarter, AI deserves the same oxygen (and likely even more in the current climate).
Demand real metrics. EBITDA impact, incident rate, and model-card compliance metrics will go a long way. Ditch the vanity dashboards.
Fund governance. Budget for red-team audits and data-quality fixes before the shiny prototype. This will foster a much needed air of seriousness around privacy and security, and protect your business long-term.
Reward literacy. Tie exec compensation to AI-fluency training completion across the top 200 leaders.
AI will rebuild entire P&Ls whether boards engage or spin PR fluff. The directors who move from buzzword bingo to disciplined oversight will have the best shot at seizing the upside and dodging the face-plants.
Everyone responds to incentives.
The incentive for most board directors is to be risk averse and not rock the boat.
Their goal is to keep collecting fees from 2-3 public boards for as long as they can after retirement from their corporate C level gig.
They missed every other mega trend in tech over the last few decades why wouldn’t we assume they’ll be behind the curve on AI adoption?