A new survey from Gartner reveals that 80% of non-executive directors (NEDs) believe their current board practices and structures are inadequate for effective AI oversight. Despite this, an overwhelming 91% of NEDs view AI as an opportunity for shareholder value rather than a risk. This optimism about AI's potential value is even more pronounced among board members than CEOs, CIOs, and other executives, according to Gartner studies.

"Boards are remarkably optimistic about AI's potential value, even more so than chief executive officers (CEOs), chief information officers (CIOs), and other executives, when compared across Gartner studies," said VP Analyst at Gartner, Daniel Sanchez Reina. "However, most boards recognize they are not well-equipped to oversee AI because most board members are not digital natives and lack technology backgrounds. Until recently, technology topics rarely took significant time on board agendas. But cyber-risk and AI are changing that, and NEDs are moving quickly to increase their tech-savvy and find new ways to provide oversight."

The survey also highlights that 93% of boards see cyber-risk as a threat to shareholder value, with 67% rating current practices and structures as inadequate for effective cyber-risk oversight. Interestingly, 58% of NEDs express a desire to take more technology risk rather than less. "NEDs almost universally recognise cyber-risk threats and express concern about current board practices to provide effective oversight. However, the majority of NEDs (58%) express a desire to take more technology risk rather than less," said Distinguished VP Analyst and Gartner Fellow, Tina Nunno.

AI was identified as the number one investment for greater shareholder value in the next two years by NEDs. Technology other than AI was in the top five investments for 57% of the respondents, and cyber-risk investments for 39%.

Nunno points out that "Boards have moved beyond curiosity about AI and are now actively engaging their CEOs and management teams to understand opportunities to use AI to deliver efficiencies and drive new revenue opportunities."

The survey also indicates a shift in board recruitment, with 77% of NEDs stating they will need to assign more directors with technology expertise in the next 12 months. Furthermore, 72% said they will need to recruit more directors with cyber-risk expertise.

"NED willingness to make structural changes to boards, and shift their CEO recruiting profile, indicates that they believe that technology will be a critical driver of shareholder value going forward," Nunno said.

The survey also found that NEDs have a strong preference for the communications provided by their CEOs and chief financial officers (CFOs), which are often heavily financial in nature and directly link to financial statements. This suggests that as boards seek to increase their tech-savvy, they will also need to ensure that their communication strategies evolve to effectively convey the potential risks and rewards of technology investments.