The Corporate Director Podcast

Episode: Understanding Sovereign AI: What Boards Need to Know Now
Date: February 24, 2026
Host(s): Dottie Schindlinger (Executive Director, Diligent Institute), Megan Day (Strategy Leader, Diligent)
Guest: Josh Klein (Board member, CEO, AI strategist, advisor to countries and Fortune 500 companies)

Episode Overview

This episode delves deeply into “sovereign AI”—the role of artificial intelligence as core national infrastructure—and what that means for corporate boards. Through a thought-provoking conversation with Josh Klein, a seasoned AI strategist and advisor to both corporations and governments, the episode explores how rapidly accelerating AI adoption impacts governance, risk management, board strategy, national policy, and the future of business leadership. Practical insights and candid dialogue focus on how directors and executives should be engaging with AI—not at a surface level, but with real curiosity, strategic thinking, and hands-on experimentation.

Key Discussion Points & Insights

1. State of AI in the Enterprise (00:54 – 07:17)

• Explosive Growth:
  • Organizations have increased workforce access to sanctioned AI tools by 50% in just a year, with ~60% of employees now using approved AI in their workflows.

    “They've said that companies have increased workforce Access to sanction AI tools by 50% in a single year.” – Megan Day [01:36]

• Nature of AI Adoption:
  • A minority (34%) of companies are using AI for deep transformation; most are focused on productivity and incremental efficiency.

    “AI is delivering productivity for most, but business reimagination for few.” – Dottie Schindlinger [02:09]

• Board Strategy Disconnect:
  • Directors find overseeing strategy their biggest challenge amidst AI-fueled volatility, reflecting a gap between AI’s promise and actionable business vision.

    “We still don't have a clear picture of what that means for this company… we're probably not really digging in the way that we should to figure out, you know, how we could change, not just little incremental change, but big sweeping change.” – Dottie [03:30]

2. Governance & Risk Oversight Shifts (04:54 – 07:17)

• Rise of Risk Committees:
  • Board audit committees are becoming overwhelmed with oversight across all domains, prompting the creation of specialized risk or innovation committees.

    “Their remit was just getting ridiculous...Is it really being effective?” – Dottie [05:33]

• Acceleration from Experimentation to Enterprise Impact:
  • As AI moves from pilots to core business operations, directors must wrestle with more complex, systemic issues.

    “Lots happening, lots accelerating. And that means lots for directors to wrestle with as this sort of moves from experimentation to enterprise wide impact.” – Megan [06:50]

3. The Concept of Sovereign AI (10:14 – 13:41)

• AI as National Infrastructure:
  • Governments are beginning to treat AI as vital infrastructure—shaping “soft power” by ensuring their values and priorities are embedded in national AI systems.

    “If you're the average of your five closest friends...AI is going to be one of them. And so it behooves governments to have a voice in what that one is.” – Josh Klein [10:14]

• Beyond Efficiency:
  • Unlike previous tech waves like cloud (which extended existing processes), AI is a “memetic engine”—a system that mimics human communication and thinking.

    “Now we have AI, which in essence is a memetic engine. That's not anything we've ever had before.” – Josh [11:13]

• Predominant Role as Soft Skills & Companionship:
  • Most people use AI for advice, therapy, and social interaction, not just work tasks.

    “The predominant use of AI today is companionship...it's people looking for therapy, advice on what to do with their boyfriend, you know, how to cook a lasagna.” – Josh [11:49]

4. AI's Double-Edged Sword: Promise & Risks (12:56 – 13:02)

• AI Passes the Turing Test—and Is Weaponized:
  • Most phishing (cyber fraud) attacks are now AI-generated, and they are more effective than human-written ones.

    “The majority of phishing attacks...are being produced by AI. And generally speaking, those attacks are 60% more effective than human written ones.” – Josh [12:12]

• Should Boards Be Excited or Terrified?
  • “Well, you should be terrified.” – Josh [13:00]
  • But also excited: This is a profound, historic shift; AI can augment and amplify uniquely human capabilities.

5. Industry’s Role & Responsibilities (13:41 – 15:16)

• Faster than Government, with More Responsibility:
  • Industry can—and should—lead in upskilling, innovating, and shaping ethical AI, not just waiting for government regulation.

    “If we've learned anything over the last five years, now more than ever, companies need to own that role and have that voice or they get obviated.” – Josh [14:31]

• Advice to Leaders: Management Over Technical Mastery
  • Engaging with AI is “essentially a management challenge,” rooted in decision-making, contextualization, and communication.

    “Working with AI is essentially a management challenge. And the better it gets, the more so that is the case.” – Josh [15:16]

6. AI in Action: The Iceland Example (16:27 – 18:56)

• Real-World Uptake:
  • In Iceland, 85-90% of students use AI weekly, and 40-50% use it daily (often for homework and even dating advice).

    “Somewhere between 85 and 90% of all kids in the country are using AI weekly and somewhere between 40 and 50% are using it daily.” – Josh [16:46]

• Game-Changer in Education:
  • AI as an individualized “tutor for every student” could propel national performance, if systems adapt to support it.

7. Risks: Hallucinations, Accuracy, and Human Loops (18:33 – 19:45)

• Ongoing Concern:
  • Models are improving, but AI outputs can be wrong. Boards should calibrate expectations—technology doesn’t exceed human fallibility, except perhaps in life-or-death fields.

    “Have you ever worked with a human being that didn’t make mistakes?...Why? You know, if I could hire someone who had encyclopedia knowledge...if it was wrong, occasionally, I don’t think I’d throw out my hands.” – Josh [19:00]

8. What's Next: Alignment, Agentic AI, and Continuity (20:12 – 21:56)

• Model Alignment & Ethics:
  • Boards will increasingly need to grapple with “alignment”—how AI models reflect societal values, avoid harm, and align with company purpose.

    “What does it mean for an AI model to support Western democratic values...these, again, memetic engines have a huge influence on human beings.” – Josh [20:12]

• Ongoing, "Agentic" Relationships with AI:
  • Next evolution: AI agents with persistent memory, ongoing relationships, and deep integration with user workflows (calendar, documents, etc.)

    “It has one permanent ongoing conversation with you and a memory framework. So it has compounding and iterative memory.” – Josh [20:44]

9. Risks of Workforce Churn, Talent Gaps & Leadership Pipelines (22:09 – 26:33)

• Death by Churn:
  • Companies reducing headcount thanks to AI may be disabling their future talent pipeline and capacity for innovation.

    “The people that you need most for your company to continue to exist a year from now have all been leaving the building.” – Josh [22:09]

• Disrupted Paths to Leadership:
  • Traditional “start at the bottom, learn, rise to executive” paths may vanish; directors must rethink how to equip future leaders in an AI-dominated environment.

    “That pipeline is getting disrupted and how do we cultivate leadership if they're not learning the basic ropes?” – Dottie [23:24]

10. Boardroom Advice: Questions and Culture, not Technical Certification (26:33 – 28:54)

• Key Questions for Management:
  • What tools are people using? For what? How does culture support AI exploration?

    “If you get blank stares, then that's where you got to start.” – Josh [26:52]

• Directors Don’t Need to Be Tech Experts:
  • The right questions and curiosity matter more than technical depth; subject expertise + AI tools yield results.

    “You don't need the technical capacity to explore where there can be value. All you need is access to an AI and an ability to ask intelligent questions.” – Josh [27:59]

11. Expertise: Redefining the "AI Expert" (28:54 – 31:46)

• No One Is Truly an “AI Expert” Now:
  • The field is too new and too dynamic for a static definition; experience, curiosity, and contextual understanding matter most.

    “Does it make sense to ask whether companies have AI expertise? Sure...But is it worth going out and buying a grad from a Ivy League school so you can check that box? I mean that's a signaling exercise.” – Josh [29:24]

• Evaluating "Experts":
  • Boards should focus on advisors who understand their business and add value, not just technobabble.

    “See if they have an understanding of their business and can add some value. And that doesn't mean spouting a lot of, you know, acronyms.” – Josh [30:57]

12. Action Steps for Directors (31:46 – 32:55)

• Start:
  • Get hands-on; subscribe to an AI model, experiment, learn through use.

    “Start by getting a subscription to a model and asking it what they should know and have some conversations with it.” – Josh [31:59]

• Stop:
  • Don’t just buy “AI for X” packaged tools; work with raw models to better understand potential and risks.

    “Stop buying, how would I call it? Halfway models...figure out how to use the raw tools.” – Josh [32:12]

• Continue:
  • Stay curious, keep asking questions—nobody has all the answers in this fast-changing landscape.

Notable Quotes & Memorable Moments

• On AI's pace:

  “It really is happening quickly. It really is pretty...leaves you a little breathless.” – Dottie Schindlinger [02:09]

• On AI’s role in everyday life:

  “AI is going to be one of [your top five closest friends]. And so it behooves governments to have a voice in what that one is.” – Josh Klein [10:14]

• On risk committee overload:

  "Their remit was just getting ridiculous. I mean, they were literally being asked to oversee every kind of risk..." – Dottie [05:33]

• On “death by churn”:

  “The people that you need most for your company to continue to exist a year from now have all been leaving the building.” – Josh [22:09]

• On what directors should do:

  “Working with AI is essentially a management challenge. And the better it gets, the more so that is the case.” – Josh [15:16]

• On expertise:

  “Does it make sense to ask whether companies have AI expertise? Sure...But is it worth going out and buying a grad from a Ivy League school so you can check that box? I mean that's a signaling exercise.” – Josh [29:24]

• On the role of humans in the future of governance:

  “I think the biggest difference [in boardrooms ten years from now] will be the number of humans in the room. Just to throw something spicy in there.” – Josh [33:08]

Important Timestamps

• 00:54 – 07:17: State of AI in the Enterprise & Board Oversight Challenges
• 08:45 – 13:41: Josh Klein on Sovereign AI, AI as Infrastructure
• 16:27 – 19:45: Iceland & AI in Education, Hallucination Risks
• 20:12 – 21:56: Alignment, Agentic AI, Ongoing AI Relationships
• 22:09 – 26:33: Death by Churn, Leadership Pipeline Risks
• 26:33 – 28:54: What Boards Should Be Asking
• 28:54 – 31:46: Rethinking the Idea of “AI Expertise”
• 31:46 – 32:55: Josh’s Start/Stop/Continue for Directors
• 33:08 – 34:41: Lightning Questions; Flat Organizations, Human Roles
• 37:53 – 43:58: Hosts’ Analysis on AI Expert Paradox, Worker Experience Loss, Innovation Risks

Related Reflections & Key Takeaways

• The term “AI expert” is now nearly meaningless; real board value comes from curiosity, pattern recognition, and domain understanding, not credentials.
• Directors should get hands-on with AI to build intuition and informed skepticism.
• Companies need to balance the drive for efficiency with sustained human-led innovation and talent development. Over-reliance on AI without cultivating future leaders is a strategic risk.
• Governance frameworks (risk, innovation, audit committees) should evolve to match the unique challenges and pace of AI disruption.
• Industry has a critical role not just in adoption but in setting norms, ethics, and responsible guardrails in advance of slower-moving government policy.

Final Thoughts

This episode is a sharp, candid, and practical exploration of how directors and executives should approach AI—not with fear or awe, but with hands-on learning and open, contextual questioning. Boards must stay strategically engaged, embrace ambiguity, and foster a culture of experimentation—not just to survive AI’s disruption, but to harness its transformative potential.