The Secrets of AI Savvy Boards

While corporate boards have educated themselves on digital transformation, far fewer have a handle on AI, the MIT Center for Information Research (CISR) has found. In this interview, Stephanie Woerner, the center’s director and principal research scientist, explains what AI savvy boards do differently.

When MIT Center for Information Research (CISR) conducted a study into the digital savviness of company boards in 2019, its researchers found that 24% had three or more directors who were digitally savvy (defined as “an understanding, developed through experience and education, of the impact that emerging technologies will have on businesses’ success over the next decade.”) And that expertise earned their companies some significant performance premiums.

When CISR repeated the research in late 2024, however, they found that digital savvy was no longer a differentiator; 72% of boards now qualified. “We had to up the bar,” said Stephanie Woerner, director and principal research scientist at MIT CISR.

Updating the research criteria to look at board savvy related to newer technologies —notably, AI and machine learning— delivered results similar to the study five years earlier. The 26% of boards that were both digitally and AI savvy were overseeing companies that outperformed their peers in different ways.

The 2024 MIT CISR research, based on a machine learning analysis of 2,788 publicly traded U.S. companies with over $1 billion in revenues along with board member interviews, offers not only clear incentive for boosting boards’ AI sophistication but also some direction for how to do so. The Heller Report talked to Woerner about how companies with AI savvy boards outperform others, what AI savvy boards do differently, why board technology committees matter now more than ever, the challenge of finding board members with AI expertise, and best practices for board-level AI education.

Stephanie Overby: How do you define an AI savvy board versus just a digital savvy board?

Stephanie Woerner: We’ve made some strides in getting boards to be more digital savvy. Digital savvy boards know what digital technology can do for their companies; are able to think about it at an enterprise level versus an individual level; have a sense of when to experiment, expand, and scale; and understand how to balance project and business model risk. 

An AI savvy board is thinking about AI along those same lines — but more so. AI affects both customer experience and operational efficiency. Plus, it’s so new and moving so fast that it’s hard for companies and their boards to stay on top of it. AI savvy boards are thinking about how their companies get value from AI. And AI is rapidly becoming an entire board responsibility. It can’t just be two or three people staying on top of it.

Having a digitally savvy board is now table stakes. Your high-level takeaway is that to thrive in today’s dynamic business environment, boards must be digitally savvy and AI savvy. What did your research reveal about the boards that fall into that category?

We complemented our findings with an examination of board committees. Boards that were AI savvy were statistically more likely to have some kind of technology and innovation committee. That’s been a big matter of discussion: whether boards should have a technology committee or not. It’s often a way to get a board jump started in terms of rapidly changing technologies.

What became clear with this research is that having a technology and innovation committee helps boards optimize their time. Making time for strategic technology topics is hard; the board members we interviewed were wringing their hands because they have very crowded agendas. They can’t address all these issues in a full board meeting. The committee can spend more time on them, and winnow down these ideas to bring something to board to consider.

A technology and innovation committee also a signal to the board, to the company, and to the market that this is an important topic.

The second thing we found was a shift in terms of board discussions. In 2019, digitally savvy boards were focused on digital transformation, cybersecurity, and IT reliability. Cybersecurity remains an important topic— maybe more so in 2025. But today’s digitally and AI savvy board is thinking about how they can get value from AI, where it’s going to fit in, and what they need to think about in terms of governance and data. 

One board member you interviewed noted that prior to creating a tech and innovation committee, around 10% of the audit committee’s time and 20% of the overall board’s time was spent discussing tech strategy. But now the tech and innovation committee spends 80% of its time on strategic issues and the overall board spends 40% of its time on tech strategy. Who typically makes up these tech committees and what do they do?

At its core, a technology committee is a way of bringing in expertise. There may be three board members on a tech committee, but they also may bring in the CIO to work closely with them or someone else who’s not on the board.

The main issue is that corporate boards are struggling with time. They have so much on their plates, and their agendas are so structured that they don’t have time to explore a lot of new ideas. They may have a retreat and bring everyone together for three days to look at strategy, but for the most part they’re tied to an agenda. Committees can be more free form and deal with issues that aren’t on the agenda. They can really focus on a specific topic.

Companies with digitally and AI savvy boards outperformed others in two key metrics. They had an average return on equity (ROE) of 10.9 percentage points above industry average while non-savvy boards were 3.8% below their industry average. In addition, they had much larger market caps than the companies without savvy boards: $15.5 billion higher than their industry average versus $5.4 billion lower when boards lacked AI expertise. What does that tell us?

It suggests a different focus on outcomes. When companies were doing digital transformation, there was a sense of how you got value from digital – better customer experiences, getting closer to the customer, better processes. Companies with digitally savvy boards in 2019 outperformed others in return on assets, revenue growth, and market cap growth.

With AI, the question of where companies are going to get value is unsettled. Sure, there are lots that are getting value in day-to-day operations – summarizations and generating content — but that’s not a competitive advantage. So, it makes sense to have different measures right now.

The companies with digitally and AI savvy boards were likely larger and more highly valued based on growth and other expectations. Large companies naturally have more resources to throw at AI. And the combination of digital and AI can have a greater impact on the bottom line with less focus on fixed assets.

Beyond having a technology committee, how can boards to boost their AI savvy? After all, you noted that AI should be a priority for the full board, not just two or three members.

Knowing that this is a fast-moving field, you have to do a lot of education. You bring in outside speakers, you provide technology demonstrations, you develop board education programs. We [at MIT CISR] present to boards, using information from our AI Maturity Model and some of our new research about where business models are going. Then we have a conversation so that they can build out what the range of opportunities might be.

CIOs can also bring in use cases from the company itself. It’s a good opportunity to showcase your talent and also provide the board with examples that are truly relevant.

What’s your overarching message when you present to boards about AI?

It’s time to move beyond pilots to scaling. Are your systems in shape? Have you thought about the talent you need? How will you stage these things? Do you have governance in place, especially when thinking about agents and not having a human in the loop? Can you have human at the helm as you try to achieve that? How will you measure value? These are hard issues, and that’s why so many companies are stuck in pilot mode. Boards need to be able to ask those kinds of questions.

When ChatGPT came out, everyone wanted to do something with AI. And I would say, “What’s the business problem you’re trying to solve?” And they would say, “Well the board says have to do something.” But you shouldn’t spend oodles and oodles of dollars unless have sense of where the value is.

We did a case study on Guardian Life Insurance. They had people coming up with so many AI ideas, they had to set up a prioritization process. They found that individual productivity shaves were not where they got organizational value. Now, they have some projects they think will be transformational. They require work on the guts of company: changes in operating model, thinking about talent differently, streamlining processes. All big things. That’s where the value is: thinking about this at the enterprise level.

How hard is it to find board members with AI expertise?

These people are in huge demand and, if they’re in workforce now, they may only be allowed to be on one board because of the time commitment. Boards used to meet once a quarter, now they have monthly meetings plus committee meetings. The ones with the most knowledge of AI are in the middle of their working careers, so getting them on a board is going to be tough.

We talked to individual board members that are quite AI savvy. Often, boards have a couple of people who are very up on what’s going on. Getting the expertise required on boards will take a while. But if you don’t start to do that broader board education, there’s a real chance that companies will fall behind.

We don’t know exactly how AI is going to change organizations, and it could take a while. But it’s incumbent on board members to become AI savvy. They can’t just provide oversight. They have to know what their leadership teams are trying to accomplish. And boards have to take the long view of what they think company is going to look like.