Australian boards push AI but lag in oversight & expertise gaps

Australian boards are accelerating their focus on artificial intelligence (AI) and digital transformation, but many continue to lag in governance and oversight frameworks, according to a new survey conducted across the Asia-Pacific region.

AI priorities

The survey found that 43% of governance leaders in Australia have placed AI adoption at the forefront of their strategic agendas. In response to emerging risks, 61% of organisations have established restrictions or clear definitions for employee use of AI.

Despite this proactive stance on AI adoption, only 13% of Australian boards have appointed directors with specific AI expertise. A smaller proportion, just 21%, require their directors to undergo AI-related training. This gap highlights significant challenges in equipping boardrooms with necessary skills amid rapid technological change.

Governance shortfall

AI adoption is moving faster than the development of oversight frameworks. Only 37% of boards have audited current AI usage to measure employee engagement with AI systems. The data suggests many Australian boards lack comprehensive visibility into how AI is being deployed within their organisations.

"Australian boards are moving quickly to integrate AI into their businesses but are slower to build the governance frameworks needed to keep pace," said Dottie Schindlinger, Executive Director, Diligent Institute. "With too few organizations auditing AI usage, recruiting directors with AI expertise, or mandating training, they risk a significant mismatch between AI adoption and AI oversight."

Regional comparison

Australian boards are more cautious than their Asian counterparts regarding employee use of AI. The research shows that 61% of Australian organisations restrict employees' use of AI, compared with 30% of organisations in the rest of Asia.

Asian boards, however, are more inclined to seek directors with AI expertise. In Asia, 28% of boards have appointed directors with AI experience, more than double the figure in Australia. This indicates a difference in approach: while Australian organisations adopt risk-based controls, Asian organisations are more likely to embed AI knowledge at the leadership level.

The survey attributes the Australian gap to a shortage of skilled AI professionals and limited AI literacy among directors.

Cybersecurity concerns

Cybersecurity has overtaken growth as the dominant strategic topic for Australian boards. More than half (53%) of Australian boards identify cybersecurity as their highest strategic priority, compared to an average of 39% across Asia-Pacific.

In preparation for their next board meetings, 47% of Australian respondents have put cybersecurity risk management ahead of growth initiatives or market expansion. This reflects heightened sensitivities following high-profile cybersecurity incidents in recent years.

Board agendas

When asked which issues should have the highest priority, 63% of Australian board leaders selected digital transformation, including AI, as their chief concern, surpassing even growth strategies, which stood at 57%.

Australian respondents also reported a stronger likelihood to focus on financial stability and economic uncertainty for upcoming board meetings (48% in Australia compared to 38% in the broader region). By contrast, respondents from other parts of Asia prioritised business continuity and crisis management (45% versus 34% in Australia).

Skills and risks

The lack of AI expertise among board members presents a significant challenge for governance in Australia. The skills shortage is particularly acute at the director level, limiting the ability of organisations to keep oversight pace with rapid technology deployment.

"The survey results reveal that Australian organisations are putting cybersecurity and AI adoption ahead of growth as their top strategic priorities, reflecting recent high-profile cyber security failures and the fear of missing out on the potential opportunities that AI technologies may deliver in the workplace. They recognise that if they don't get the balance of technology and risk right, the foundations for growth simply won't hold," said Daniel Popovski, AI and Tech Policy and Advocacy Lead, Governance Institute of Australia.