Toward an Enhanced Level of Corporate Governance: Tech Committees as a Game Changer for the Board of Directors

Abstract

Although tech committees are increasingly being included in the functioning of the board of directors, a gap exists in the current literature on board committees, as it tends to focus on traditional board committees, such as nominating, auditing or remuneration ones. Therefore, this article performs an empirical analysis of tech committees adopted by North American and European listed companies in 2019 in terms of their composition, characteristics and functions. The aim of the study is to understand what “technology” really stands for in the “tech committees” label within the board, or – to phrase it differently – to ascertain what tech committees do and whether and how they enrich the current level of corporate governance. As a result, we find that even if AI has already entered the boardroom, it has not entered the “corporate governance architecture” of companies: directors employ AI, but there is no internal procedure telling them how to effectively, efficiently and responsibly leverage its potentials and how to minimize the risks arising from its employment. Hence, to address the current lack of AI governance at the corporate level, we propose a two-layer model that pivots around tech committees and grants them a key role. In a nutshell, the article, by providing the first empirical attempt to investigate what tech committees do, unveils what they are not doing, and outlines what they should be doing instead.