While these attributes will continue to be foundational, CEOs and directors both believe that their boards’ mix of expertise needs to evolve. Their views were clear: Boards need to strengthen their bench with specialized skills such as digital and AI expertise, cyber and regulatory expertise. If anything, directors saw even more need for these skills than CEOs.

“Advances in digital and AI bring significant opportunities for businesses but also very major risks from cyberattack and misinformation,” one director told us. A CEO agreed, highlighting gaps in knowledge among board members: “AI and technology are developing at a rapid pace, and the board does not have deep experience with these issues.”

The prominence of regulatory and government experience likely reflects the way national and global politics is increasingly shaping the business landscape. One CEO noted, “As our industry changes, becomes more regulated and competition increases, we need to be able to get in front of all these challenges.”

While specialized skills are an asset in the boardroom and clearly an area of focus, boards will have to strike the right balance between “focused experts” — who have deep and current knowledge of specific topics — and “broad-gauge contributors” — who can add insight across a wide range of matters that come before the board, and ideally are dealing with similar matters in their own jobs. Further, some of this specialized expertise can be obtained by the board without necessarily adding a new director.

Two key levers to strengthen board readiness

Ensuring a board’s collective expertise aligns with organizational demands has never been more critical, but board turnover remains consistently low in the U.S. Even outside the U.S., seats are limited, and directors are expected to engage broadly across the board’s agenda, not solely within their area of expertise.

With this backdrop in mind, we advise the boards we work with to explore two paths that can strengthen their readiness for the future.

Enhance board knowledge and foresight in creative ways

When adding new directors isn’t an option, boards can tap both external and internal experts to broaden their perspective and expand understanding of emerging issues. One way is to build a “kitchen cabinet” of seasoned external professionals to bring insights on specific topics, such as geopolitics or cybersecurity. Doing so can enhance the board and management team’s knowledge and establish a solid fact base for constructive debate.

Another option is to look internally at which leaders in the organization can offer firsthand knowledge on specialized topics and help frame relevant issues for debate. As one director said, “AI and cybersecurity will become increasingly important to the company as we grow. We have internal expertise, but not board-level expertise to address these opportunities and risks.”

While C-level executives regularly present to directors, boards may need to pull in leaders deeper in the organization to get the expertise needed. Doing so has the added benefit of exposing them to the board’s inner workings and interaction.

Build a courageous mindset around refreshment

A longer-term strategy is, of course, to add new directors who bring this specialized expertise — such as digital innovation, AI or cybersecurity — to complement the board’s existing strengths. However, realizing the full value of these appointments requires boards to be thoughtful about the type of expertise they really need. For example, if AI is poised to upend a company’s business model, an academic who studies machine learning may be less helpful to a board (and CEO) in the long term than a general business leader who has successfully reinvented their category in the face of technological upheaval.

More broadly, boards must view composition as a dynamic asset — one that evolves in step with the company’s strategic direction. This includes not only bringing in new and different expertise but also promoting healthy turnover through intentional refreshment.

The most effective board succession strategies incorporate a variety of tools rather than relying on one approach. To cultivate a board that is both effective and adaptable, boards can do the following:

• Conduct frequent and robust board assessments, including individual board evaluations
• Adopt formal policies to promote refreshment (like mandatory retirement or term limits) but only as a supplement to other tools
• Undertake regular, objective reviews of board skills matrices
• Think ahead on succession planning
• Foster a dynamic board culture that views membership not as a lifetime appointment but as an evolving commitment to the shareholders and the company’s best interests.

• • •

In this rapidly changing business environment, boards that don’t move to shore up their skills are headed for a knowledge gap that could put the company at risk. Recognizing where the board falls short and taking action now can help ensure proper oversight, effective decision-making, and the ability to respond to emerging opportunities.