KPMG & INSEAD launch AI governance principles for boards

KPMG and INSEAD have launched a set of AI Governance Principles for Boards, a framework for board-level oversight of artificial intelligence.

Developed by KPMG International and the INSEAD Corporate Governance Centre, the report comes as boards face growing pressure to oversee how AI is adopted across strategy, operations and governance.

The principles are intended to help boards and senior executives address both the risks and opportunities of AI use. The framework draws on academic research, industry governance standards and input from board directors across multiple markets.

KPMG pointed to findings from its Global AI Pulse Survey showing that nearly three-quarters of boards are seen as having only moderate or limited AI expertise. That gap comes as boards are increasingly expected to assess how AI affects business models, productivity, security, workforce planning and their own decision-making processes.

Five principles

The guidance is organised around five areas: strategic oversight for long-term value creation; active technology and security oversight; workforce transformation and human accountability; trustworthy AI; and the effect of AI on the work of the board itself.

Under the strategic heading, boards are urged to oversee AI in an environment shaped by speed, experimentation and pressure for quick results. On technology and security, the report highlights trade-offs between sovereignty and the use of partners or outsourced services that may offer greater scale and agility.

The workforce section focuses on balancing productivity gains with talent management and preserving human judgement. The trustworthy AI section addresses standards that align with a company's values and regulatory obligations. The final principle asks boards to consider how AI may change their own governance practices and oversight routines.

The report also argues that boards need a clearer view of how human and AI-driven decision-making should interact. Companies may also need to reassess success measures and indicators of progress as AI changes operating models and performance expectations.

Board pressure

The launch comes as regulators and investors pay closer attention to the governance of AI procurement, deployment and monitoring. As AI tools become more widely used across organisations, accountability and trust are becoming central concerns for directors.

The framework was designed to be sector-neutral, with principles intended to apply across industries and levels of AI maturity. Boards can use it alongside local regulatory and cultural guidance when building their own governance approaches.

A brief context note in the report says the pace of AI development has intensified scrutiny of board oversight. New tools are emerging rapidly while regulatory expectations are becoming more complex across jurisdictions.

That combination is forcing boards to engage more directly with questions once left mainly to management or technology teams. These include who is accountable for AI decisions, how risk should be monitored, and how organisations can show that systems are being used in line with stated policies and values.

"By bringing together the expertise of INSEAD and KPMG, and an advisory group of experienced board directors, these Principles combine the latest academic insights in the field of AI with industry-leading technology governance standards and real-world boardroom experience," said Annet Aris, senior affiliate professor of strategy and academic director of the INSEAD Corporate Governance Centre.

"These sector-agnostic Principles have been guided by the latest research insights on technology governance and possess worldwide applicability. They are thus suitable for organizations regardless of their level of AI maturity, ready to be used by boards, along with local regulatory and cultural guidelines, as they build their own AI governance frameworks," Aris said.

The launch reflects a broader shift in expectations of corporate boards as AI moves from isolated trials to wider use across functions. Directors are now expected not only to understand the commercial upside, but also to oversee security, ethics, compliance and organisational change.

For many boards, that will mean closer engagement with management on investment priorities, the use of external technology providers and the balance between automation and human control. It may also require rethinking committee structures, reporting lines and the information boards receive when reviewing AI-related decisions.

"In a period of rapid AI acceleration, the board's strategic role is becoming more consequential than ever," said Steve Chase, Global Head of AI and Digital Innovation at KPMG International.

"Strong governance provides the confidence organizations need to invest, scale, and execute AI across markets at speed. Trust in AI-and in the governance behind it-is what turns ambition into durable value," Chase said.