AI-savvy Boards Drive Superior Performance

Back in 2019, we found that only 24 percent of large U.S. companies had "digitally savvy” boards — those with three or more directors experienced in digital technologies. These companies outperformed their peers, with more than 30 percent better performance across metrics like market cap growth.

By 2024, a striking shift had occurred: When we reran our analyses using the same digital criteria on 2,800 publicly traded companies with over $1 billion in revenue, we found 72 percent had digitally savvy boards. The catch? Being digitally savvy by 2019 standards no longer correlated with superior financial performance. Digital literacy was now table stakes.

So we updated our criteria to include newer technologies like generative AI, AI agents, robotics and specialized tech like regulatory technology and fintech. Only 26 percent of companies clear this new bar for "digitally and AI savvy" boards — but these companies are dramatically outperforming their peers.

Please select this link to read the complete article from MIT Sloan Business Review.