The Corporate Director Podcast

Episode: AI Status Report from the Boardroom

Date: April 30, 2025
Host: Dottie Schindlinger & Megan Day
Guest: Claudia Allen, Senior Advisor, KPMG Board Leadership Center

Brief Overview

This episode dives into the evolving role of Artificial Intelligence (AI), particularly generative AI, in corporate boardrooms. Hosts Dottie Schindlinger and Megan Day discuss key themes from Diligent’s recent AI Innovations Virtual Summit and highlight prominent voices in AI-driven governance. The episode features an in-depth interview with Claudia Allen of KPMG’s Board Leadership Center, exploring how boards are grappling with AI oversight, required expertise, governance structures, risk management, and practical insights drawn from research and recent director surveys.

Key Discussion Points & Insights

1. The Boardroom AI Conversation: Current Landscape

• AI is rapidly transforming corporate governance: Companies are moving beyond ChatGPT and experimenting with integrating AI into risk, compliance, and reporting functions.
  • “It’s really upending how organizations can do work and I think that’s so exciting and interesting to see.” – Megan Day [01:22]
• Board leaders must accelerate their AI understanding and oversight.
  • “I guarantee you there are people working at the company that use it every single day. You just don't know about it.” – Dottie Schindlinger [06:39]

2. The Shopify “First AI” Memo – Cultural Provocation & Practical Impacts

• Shopify’s CEO, Tobi Lütke, issued a company-wide challenge: “Before asking for more headcount and resources, can AI do this?”
  • “It's intentionally a little bit provocative… but everything in his takeaways really resonated with me… it's something that I have now asked myself probably on a daily basis.” – Megan Day [03:21]
• The difficulty lies in operationalizing AI—employees and boards must bridge the gap between possibilities and practical implementation.

3. Duty of Care & AI – A Shifting Standard

• The emergence of AI may redefine board directors’ duty of care, as new technologies increase the information directors are expected to access and comprehend.
  • “The question for me becomes: does that then become the new standard of duty of care?” – Dottie Schindlinger [04:26]
• Boards that ignore or inadequately consider AI risk lag behind evolving expectations.

4. AI Expertise on Boards: Necessity or Overrated?

• Key question: Should boards recruit a dedicated “AI director”?
  • “A lot of boards have a natural inclination not to bring on somebody who's just a narrow domain… So I think one of the questions is: how central is AI to the business?” – Claudia Allen [12:37]
• More boards are turning to advisory boards or external expertise, with ongoing director education seen as crucial.

5. Committee Approaches to AI Oversight

• AI oversight is not siloed—committees coordinate roles:
  • Audit Committee: Should oversee use of GenAI in financial statements/regulatory filings, ensure internal controls are updated, and manage compliance with evolving regulations and ERM integration. Must assess bandwidth and skill set sufficiency.
  • Nominating/Governance Committee: Focuses on director education and relevant skill sets.
  • Compensation Committee: Considers impacts on workforce, reskilling, and prohibited uses of AI.
  • Tech Committee: Increasingly common in tech-centric businesses, but presents questions of skill and scope.
  • “Eventually all three [standing committees] will have some role to play in overseeing aspects of AI.” – Claudia Allen [13:56]

6. Highlights from KPMG Board Leadership Center AI Survey (2025)

• Fewer companies are stuck in “pilot” phase; more are scaling or integrating AI into strategies.
• Yet only 40% of companies report established AI risk management frameworks—a concern for Claudia Allen.
  • “I would have hoped that more companies have those in place… it really is an issue that directors should be looking at.” – Claudia Allen [18:03]
• Risks: Most concerning are inaccurate data/results; lack of internal expertise is now seen as the biggest impediment to AI adoption.
  • “The need for new skills and talent was the most significant impediment.” – Claudia Allen [18:48]

7. Opportunities: Efficiency First, Transformation Next

• Directors see greatest near-term benefits in efficiency, productivity, and operational cost reduction.
  • “Over three quarters said efficiency, productivity, and savings were the most significant benefits.” – Claudia Allen [19:48]
• The challenge: moving beyond efficiency to transformative applications.

8. Practical Advice for Boards

• Continuous education is essential—AI is evolving too rapidly for “one and done.”
  • “You can't oversee something you don't understand.” – Claudia Allen [20:20]
• Monitor the fragmented regulatory environment closely.

Notable Quotes & Memorable Moments

• “If you're not leveraging AI tools to make good board decisions, are you going to get yourself in trouble?” – Dottie Schindlinger [05:09]
• “The biggest risk is not paying enough attention… Even directors, if you think your company is not using AI, you are already wrong.” – Dottie Schindlinger [06:39]
• “The best questions that directors can ask at the board table are seemingly the most basic, but not simple… What does this technology do? How do we know it does that?” – Dottie Schindlinger [07:43]
• “Everyone needs to ratchet up their level of understanding of AI… It is just table stakes.” – Dottie Schindlinger [09:56]
• “Only 40% of the respondents said their companies had put in place AI risk management frameworks.” – Claudia Allen [18:03]

Interview: Claudia Allen, KPMG Board Leadership Center

Key Segments

• Introduction & Role at KPMG BLC: [10:46–11:38]
• How Boards Are Approaching AI/GenAI: [11:56–12:23]
• Board Expertise Needs (& Advisory Boards): [12:37–13:49]
• Committee Oversight Structures: [13:56–16:42]
• Survey Findings on AI Adoption, Risks, Opportunities: [17:03–19:48]
• Best Advice for Boards: [20:15–20:55]
• Forward-looking Q&A (“Difference in 10 Years/Current Passion”): [21:09–22:36]

Closing Reflections

• AI is shifting from “pilot” to strategy and business integration, but governance frameworks and directorial expertise are often lagging.
• Boards must actively educate themselves and adapt their committee structures and risk frameworks to ensure oversight keeps pace.
• Initial AI benefits focus on efficiency, but transformative gains—and ethical/duty of care challenges—are on the horizon.
• Continuous inquiry, candid conversations, and diverse board perspectives are essential to responsible and effective AI governance.

Timestamps for Key Segments

| Segment/Event | Timestamp | |----------------------------------------------|------------------| | AI Innovations Virtual Summit Recap | 00:51 – 01:50 | | Discussion of Shopify “First AI” Memo | 02:53 – 04:26 | | Duty of Care & AI Standard | 04:26 – 06:39 | | Importance of Basic Questions in Governance | 07:43 – 08:20 | | Diversity of Thought & Board Expertise | 08:27 – 10:27 | | Claudia Allen Interview Begins | 10:46 | | How Boards Approach GenAI | 11:56 – 12:23 | | Board/Committee Oversight Approaches | 13:56 – 16:42 | | Survey Findings/Key Stats | 17:03 – 18:48 | | Opportunities/Benefits of AI | 19:48 – 20:15 | | Final Advice for Boards | 20:20 – 20:55 | | Looking Forward/Passion Projects | 21:09 – 22:36 | | Closing Reflections and Call to Action | 22:57 – 25:00 |

Tone & Takeaways

The conversation is insightful, practical, and occasionally lighthearted, balancing optimism about AI opportunities with sober warnings about risks. The repeated advice: Boards don’t need to be AI experts, but cannot ignore their responsibility to educate themselves and adapt their oversight.

“Just have the conversation, just ask the questions, just get started.” – Dottie Schindlinger [24:49]

For those new to this topic or unable to listen, this episode offers a comprehensive status report on how the boardroom is adapting to AI—and why active, informed engagement is more vital than ever.