Boards have spent much of the past decade adapting to an expanding governance agenda. Technology, cybersecurity, geopolitical uncertainty, workforce transformation and other issues that were once considered emerging are now embedded in the board’s core responsibilities.
That evolution raises a more fundamental question: Do boards have the capabilities they need to govern what comes next?
Our 2026 Annual Corporate Directors Survey suggests many directors are asking themselves that question. More than half (55 percent) say at least one director on their board should be replaced. While that figure is consistent with last year, the reasons are shifting. Among those directors, 39 percent cite insufficient expertise as a reason for replacement, up from 21 percent in 2025.
Yet expertise alone does not make an effective board. When evaluating prospective directors, 81 percent say alignment with the board’s culture and ways of working is very important, compared with 27 percent who say the same about specialized expertise such as AI, cybersecurity or sustainability.
Those findings should not be viewed as an either-or choice between fit and expertise. Boards need directors who can work productively with one another, challenge assumptions and exercise sound business judgment. At the same time, as strategy, technology and risk become increasingly interconnected, directors need enough relevant and current knowledge to evaluate the answers they receive from management and understand their implications for the business.
The challenge for boards is to define those capability needs with greater precision. A skills matrix can help, but only if it goes beyond résumé credentials to consider the depth, relevance and currency of directors’ experience. Boards can then determine which gaps can be addressed through education and development, where external expertise can supplement the board, and where recruitment or refreshment may be necessary.
AI is putting boardroom fluency to the test
Artificial intelligence provides perhaps the clearest example of how quickly those capability needs can change.
AI is increasingly a strategic issue for boards, shaping how companies compete, invest and create value. That shift is showing up in the boardroom: 71 percent of directors say their boards need to strengthen their AI skills to provide more effective oversight—more than twice the next-highest response. But that does not mean every board needs to recruit an AI technologist. Directors do not need to know how to code or build an AI agent. They do need enough fluency to understand how the technology is being used, how it could affect company strategy and where it may change the risk profile they are responsible for overseeing.
Fluency also depends on the quality of information directors receive. Fewer than half of directors rate the information they receive about their company’s AI strategy and value-creation goals as good or excellent. And 82 percent rate information connecting AI outcomes, risks and business performance as fair, poor, or not provided.
That creates responsibilities on both sides of the board-management relationship. Directors should build their understanding through targeted education, practical experience and access to internal and external expertise. Management should bring directors along as the company’s AI strategy develops and provide decision-useful information that connects investment, risk and outcomes to the broader business. Boards and management should also establish clear protocols for approved AI use so directors can gain practical experience within appropriate legal guardrails, confidentiality and security.
From expertise to judgment
Ultimately, stronger expertise and better information matter because they enable better judgment.
That becomes especially important in strategy oversight. Eighty-one percent of directors say their boards could more effectively challenge management on corporate strategy. Directors point to clearer metrics for tracking progress, alternative strategic options and trade-offs, scenario analysis, and peer benchmarking as ways to deepen that engagement.
Management has a role to play as well. Eighty-two percent of directors see opportunities to improve the board materials they receive. Their responses emphasize sharper insight rather than greater volume: better synthesis of key issues, more time for strategic discussion, more forward-looking analysis and stronger strategic KPIs.
The objective should not be certainty. Boards rarely have that luxury, particularly when technology and external conditions are changing quickly. The objective is to build enough confidence to act—to understand the assumptions behind management’s recommendation, consider credible alternatives, recognize the signals that might require a change in direction and know where board judgment can add value.
That is why the board capability question extends well beyond who occupies a particular seat. Effective boards continually refresh their knowledge, assess where gaps exist, strengthen how they work together and challenge management constructively. Executives reinforce that effectiveness by giving directors the context and information they need to engage on the issues that matter most.
The governance agenda is unlikely to become less complex. Boards do not need an expert for every new issue that emerges. They do need the expertise to understand what is changing, the processes to elevate what matters and the judgment to act when it counts.
