The Next Competitive Edge? AI That Thinks Like a Director

Private company directors should consider this when adopting artificial intelligence in the boardroom to streamline governance and enhance decision-making.

Artificial intelligence is no longer in the distance; it is reshaping how organizations and boardrooms operate and govern. For private company boards, the question is no longer whether to use AI but rather how to do so responsibly, effectively, and in line with directors’ fiduciary duties.

For private company boards facing unique constraints, such as smaller executive teams, tighter schedules, and more informal governance structures, AI can be a force multiplier that helps directors govern efficiently and with deeper insight.

What AI’s Arrival Means for Private Company Boards

AI is already being adopted by private company boards to streamline the mechanics of governance. Some boards are beginning to pilot or implement AI tools to ease administrative burdens and sharpen oversight. This is especially true at start-up or family-owned enterprises.

Common board use cases include the following:

• Pre-read summarization. AI tools can condense lengthy board packs into digestible summaries that highlight risks and action items. This is particularly helpful if management delivers pre-read materials within two days of the meeting date.
• Meeting preparation. Some AI tools can analyze previous board materials and generate contextual questions, helping directors show up to meetings more informed and ready to engage.
• In-meeting assistance. AI can suggest agenda refinements, track time allocations, or prompt directors to stay on-topic when discussions drift from critical priorities by helping structure better agendas and analyzing transcripts after a meeting occurs. While few tools actively “listen” to meetings due to privacy concerns, some can review transcripts to support accurate minute-taking.
• Post-meeting workflows. AI-powered assistants can automatically generate task lists, log decisions, and identify items that require follow-up, reducing the workload for the corporate secretary or general counsel.

AI tools vary in sophistication. Some are embedded within board management platforms; others are standalone AI assistants. Importantly, most are being used in preparation for or after meetings. They are typically not being used during live conversations, where privacy and security remain sensitive concerns.

AI with Purpose, Not Hype

Private company boards considering adopting AI in the boardroom are not merely following a trend. They are supporting their fiduciary responsibilities with greater clarity and efficiency. As such, AI should be adopted with clear guardrails, particularly around data security and privacy.

Board materials contain sensitive company information, including details about an organization’s financials, legal exposures, strategic plans, and leadership discussions. Before adopting any AI tool, boards should scrutinize the following with potential board portal vendors and the company’s information technology staff and general counsel:

• Data handling practices. Where are data stored and processed? Are data encrypted while sitting in storage and being sent through email or upload? Are board data used to train third-party models?
• Access controls. Can data access be limited by role (e.g., director or management)? Is there documentation of who accesses what materials?
• Auditability. Can the board demonstrate how the AI tool makes decisions and what information is surfaced, in the event of legal review?

Additionally, boards should ask vendors questions about compliance with privacy regulations, such as the European Union’s General Data Protection Regulation and the United States’ Health Insurance Portability and Accountability Act of 1996; data residency; contractual protections; and what the vendor’s algorithms do and do not analyze. Directors should include the company’s general counsel or chief information security officer in these evaluations.

Choosing AI tools that are built for governance, rather than retrofitted general productivity apps, is often a more prudent path for private companies that may have limited IT resources. AI tools built for governance embed compliance, security, and oversight by design. Unlike retrofitted productivity apps, they reduce IT burden, limit risk, and align with governance workflows directly, making them a more efficient and safer choice for private companies with limited technology resources.

Finally, private company boards should be cautious about building their own AI tools. While custom development may offer more control over confidential data, it can be costly, resource-intensive, and introduce new security risks. Instead, private company boards often find greater value in adopting purpose-built, governance-focused AI platforms that already embed compliance, security, and privacy safeguards.

The Director’s Role

Adopting AI in the boardroom is a governance decision, not merely a technology upgrade, and directors have a pivotal role to play in guiding that journey. Discussions on incorporating AI into board duties may stem from chairs or committee leaders with concerns about time constraints or meeting inefficiencies, or a director with digital expertise as part of broader modernization efforts.

Moreover, corporate secretaries, general counsel, or chief technology officers can raise this opportunity to the board level if they come across an AI platform of interest when reviewing new governance tools or managing board materials and minutes.

Regardless of who initiates the conversation, evaluating and implementing AI tools should be a cross-functional process. Ideally, it includes input from:

• the CEO, who ensures alignment with strategic direction;
• the general counsel, who vets legal and compliance risks;
• the company’s IT or data security leader, who assesses infrastructure and integration; and
• one or more directors, who evaluate usability and governance impact.

Boards should consider structured pilots, or short-term test runs that are focused on one or two use cases, to gather feedback, understand tool value, and surface concerns before a broader rollout.

Directors also have a role in championing AI literacy. This involves understanding the technology’s core principles, including how AI makes decisions, where its boundaries lie, and how to spot when it might need human correction. Directors can champion AI literacy by modeling responsible use cases, embedding it into board discussions, and encouraging ongoing board education.

A Glimpse Ahead

AI is evolving rapidly, and the next wave of tools will likely go beyond administrative assistance to offer true strategic insight. For private company boards, the next evolution could include the following abilities:

• Pattern recognition in risk signals. An AI tool may notice a pattern of reporting delays, internal process issues, or compliance risks, and staff turnover in certain departments, which management could flag as an early indicator of operational strain.
• Strategic decision-mapping. AI tools may begin linking past decisions with current outcomes, helping boards evaluate what worked, what didn’t, and why.
• Leadership continuity planning. AI may be able to analyze tenure trends, performance data, and external benchmarks to suggest when a board may want to start planning for a leadership transition.
• Governance benchmarking. For boards unsure whether they are "keeping up," AI tools could provide anonymized comparisons to similar organizations in terms of board diversity, meeting cadence, and structure, among other areas of importance.

These aren’t futuristic fantasies. They are already in development. Boards that lay the groundwork now will be better positioned to use these capabilities responsibly and effectively in the future.

The Bottom Line

AI is not a replacement for board judgment, but it can act as a powerful tool to help private company directors surface insights faster, track responsibilities more effectively, and spend more time on long-term strategy, oversight, and leadership.

Forward-thinking private company boards are already exploring how to integrate AI into their governance processes. For those that haven’t started, now is the time to begin the conversation with a focus on purpose, transparency, and responsibility.

The views expressed in this article are the author's own and do not represent the perspective of NACD.

OnBoard Meetings is a NACD partner, providing directors with critical and timely information, and perspectives. OnBoard Meetings is a financial supporter of the NACD.