Five New Imperatives For Every CEO And Board In A Changing Global Landscape

Some of America’s most accomplished chief executives have concluded they are not the leaders for this moment. Walmart’s Doug McMillon and Coca-Cola’s James Quincey stepped aside in part because they judged that the years ahead would demand new energy and a longer runway than they could provide. They were not outliers. Russell Reynolds Associates recorded 234 CEO departures from globally listed companies in 2025—a second consecutive record year—with exits continuing into 2026 at Workday, PayPal and The Washington Post. Boards are no longer asking whether the CEO delivered. They are asking whether the CEO can lead what comes next.

And what comes next is an AI-driven transformation—one that is proving far easier to launch than to land. A recent study of 6,000 senior executives found that while 69 percent said their companies actively use AI, 90 percent reported no measurable productivity impact. Meanwhile, Boston Consulting Group finds that only around 5 percent of companies are generating substantial value from the new technology. CEOs and boards must build the capabilities this moment demands by working together. Five imperatives top that agenda.

1. Own the transformation. AI is a leadership problem, not a technology problem.

The gap between AI investment and AI value is not a technology gap. Your competitors can buy exactly the same models you can. What separates the frontier 5 percent from the laggards resides at the organizational level: The 2026 AI & Data Leadership Executive Benchmark Survey found that 93 percent of Fortune 1000 data leaders identify culture and change management as the primary barriers to AI adoption. Just 7 percent point to technology.

Despite this recognition of where the real challenge lies, most companies still delegate AI to the technology function. The result is that the dimensions that will determine whether an AI initiative succeeds—culture, workforce readiness, decision rights, identity—are left with no owner. When one software company rolled out an AI coding assistant to 28,000 engineers, adoption stalled not because the company’s leadership wasn’t behind the project but because the broader organizational culture viewed AI-assisted coding with suspicion. Research at the firm showed that work labelled as AI-assisted was judged to be 9 percent less competent than identical work without the label. The result was that workers who adopted the tool risked damage to their careers. That was a cultural failure, not a technical one—and cultural signals are set at the top. CEOs must treat AI as a force that reconfigures how the organization works, owned by every senior leader. Boards must stop accepting deployment metrics as evidence of transformation.

2. Treat governance as a source of competitive advantage, not a tax on it.

This year’s IMD World Competitiveness Ranking delivered an uncomfortable message: The United States sits at 10th place globally while China is 12th. The most competitive economies—Singapore, Hong Kong, and Switzerland—are also among the most carefully governed. Competitiveness now turns on institutional credibility —predictable rules, enforceable commitments, the capacity to govern—more than on cost, scale or speed.

The same logic applies at the level of individual companies. If nearly everyone is implementing AI but only 5 percent are capturing value, the differentiator must be something the tools cannot supply. That differentiator is the decisions wrapped around every system—where it can operate, how its output is checked and where you retain the ability to change its course. Governance turns a tool anyone can buy into outputs only your company could have produced. My colleagues and I formalized an approach to this topic in the CARE framework: Catastrophize about how a deployment could fail; Assess those failure modes; Regulate what each AI system is permitted to do; and then prepare an Exit plan you can execute. AI governance is not a compliance line item. It is the substance of competition.

3. Transform on all fronts, or don’t bother.

The productivity gains generated by the adoption of new technology tend to be concentrated in a small number of firms rather than being spread equally across the economy. OECD research found the top 5 percent of “frontier” firms captured productivity gains more than four times larger than the remaining 95 percent during the digital revolution. The same pattern is repeating with AI. What distinguishes frontier firms is their willingness to transform comprehensively rather than selectively. Real enterprise transformation with AI requires six foundations, built in parallel: an innovation pipeline with stage-gated funding; a responsible governance framework woven into operations; an enterprise architecture that supports AI at scale; and the three human dimensions encapsulated by leadership, culture and workforce capability. There is no single correct starting point, but all six are mandatory; weakness in any one area constrains all the others. The board’s role in this transformation is oversight of the whole portfolio, not cheerleading individual projects..

4. Make philosophical proficiency a board competency.

Sundar Pichai has called the CEO role “one of the easier things” for AI to handle; Sam Altman has said that AI superintelligence will at some point be capable of running a major company better than any executive, including himself. These provocations rest on the assumption that leadership can be reduced to algorithmic operations. That is false. Algorithms can pursue goals, but they cannot themselves determine what is worth pursuing. Defining the purpose of the enterprise—what it is, who it serves, what it will refuse to do under pressure—involves value judgments that no algorithm can make. It is precisely this kind of judgment that boards exist to oversee. AI raises the stakes because every tool arrives with philosophical commitments built in—assumptions about what customers are, what counts as evidence, what trade-offs are acceptable.

Three practices close the gap. First, treat philosophical literacy as a board competency: Boards audit for financial expertise, but few ask whether anyone at the table can interrogate the foundational assumptions that underpin everything the business does. Second, require a purpose-and-principles impact assessment for every major AI implementation—what it assumes, what it optimizes for, whose values shaped its defaults. This is the philosophical equivalent of financial due diligence. Third, conduct an annual alignment review comparing what the organization says it stands for with the assumptions embedded in the tools it adopted over the past year. Where these diverge, the company’s commitments and its operational reality are drifting apart.

5. Rewire the board itself for continuous change.

Boards demand transformative initiatives from the senior leaders they oversee. But they rarely turn this lens on themselves. New research from Board Intelligence found that 86 percent of directors, CEOs and CFOs surveyed say rigid decision-making frameworks contributed to delayed, rushed or poor decisions in just the past six months, yet 40 percent expect little change in how their boards operate over the next five years. That posture was tolerable when transformation was episodic. But AI-driven change is continuous. Governing it requires boards to build their own AI fluency through structured education; to realign CEO evaluation and succession benchmarks against what the AI era actually demands; and to redesign meeting rhythms around forward-looking oversight of a living portfolio. Succession is urgent: With 11 2025 appointments lasting less than a year, the strength of the internal pipeline has never mattered more.

The leadership that remains

Beneath all five imperatives is a redefinition of what senior leadership involves. For half a century, the executive has been the decision-maker—synthesizing information, allocating resources, selecting among options. Machines can now do much of this work faster than we can, and their capabilities are only growing. But what will always remain is the need and ability to determine the terms on which decisions get made.

The real risk is not that AI replaces the CEO. It is that the capacity to set those terms withers away while everyone is busy marvelling at the new horizons the technology opens up. Both you and your competitors can buy the AI tools you need, but judgment cannot be procured. It has to be built, and that is work a CEO and a board can only do together.