Canadian boards have an AI problem — what is it?

Investing.com -- More than half of the companies in Canada’s S&P/TSX 60 have no board director with disclosed artificial intelligence experience, raising questions about whether corporate leaders are equipped to oversee rapidly expanding AI investments and risks, according to BMO research.

BMO said 35 of the 60 companies, or 58%, had no director with disclosed AI experience, including some financial and technology companies that are among the most active adopters of the technology. The research argues that boards do not need AI engineers, but should have enough expertise to challenge management’s assumptions, assess investments and ensure adequate controls are in place.

The report comes as Canadian companies increase spending on AI across product development, customer services and workforce management. BMO said boards with limited AI knowledge could struggle to determine whether AI strategies offer genuine competitive advantages, whether capital spending is justified or whether executives are being swept up by the technology’s hype.

AI-related risks extend beyond investment decisions, BMO analyst Doug Morrow wrote, citing potential regulatory and legal liabilities, excessive AI-related costs, data privacy breaches, cybersecurity incidents and intellectual property risks.

Board-level AI expertise is also beginning to emerge more prominently among Canada’s largest companies. Two of the country’s Big Six banks recently appointed directors with AI experience, with CIBC adding Prasanna Gopalakrishnan and Bank of Nova Scotia appointing Ralph Hamers, according to the report.

BMO identified Intact Financial, Canadian National Railway and Nutrien as having among the most AI-fluent boards in the S&P/TSX 60. Shopify and OpenText had the highest proportions of directors with AI experience or knowledge, at 33% and 31%, respectively.

Celestica was the only TSX-listed company in BMO’s review with a dedicated AI category in its board skills matrix, with four of its nine directors reporting AI competency. BMO said the explicit inclusion of AI in the skills matrix indicated a more advanced approach to board oversight.

The research also pointed to a growing role for dedicated technology committees. Bank of Nova Scotia, CAE, CIBC and National Bank of Canada have established board-level technology committees that provide a forum for overseeing AI, cybersecurity and information technology risks and opportunities.

Board education is another differentiator. BMO said directors at Kinross Gold participated in seven AI-focused continuing education sessions in 2025, the highest number among S&P/TSX 60 companies.

BMO found that board AI fluency was not closely linked to directors’ age, but said it had a stronger inverse relationship with average board tenure. Boards with shorter average tenure tended to have greater AI fluency, suggesting that board refreshment could play a role in keeping governance expertise aligned with rapidly changing technology.

Across the S&P/TSX 60, average board age ranged from 49 at Shopify to about 71 at Bank of Montreal, underscoring the wide variation in board composition as companies prepare for an increasingly AI-driven business environment.

Original Article

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