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How boards can enhance technology oversight to unlock potential

Authors

  • Lee Henderson

    EY Americas Center for Board Matters Leader

  • Jamie Smith

    EY Americas Center for Board Matters Investor Outreach and Corporate Governance Director

  • Barton Edgerton

    EY Americas Center for Board Matters, Corporate Governance Research Leader

Contributors

10 minute read 16 Sep 2025
Related topics
EY Center for Board Matters

Boards must take decisive action to guide companies in seizing opportunities and mitigating risks.

In brief
  • Boards play a critical role in guiding companies through technological changes and strategic challenges.
  • Effective technology governance requires continuous alignment between directors and management on risks and strategic goals.
  • Having structured conversations on technology oversight can enhance a board’s ability to enable strategic transformation.

To effectively oversee technology, directors need clear, timely information from management and to boost their own tech fluency to drive strategic discussions. Some boards are establishing dedicated tech committees, but is that the right answer for everyone? As with so much else, it depends—on factors such as the company’s needs, board expertise, and committee workloads—and it may evolve over time.

How EY can help

In what follows, we offer guidance to board leaders on determining how to best oversee technology to unlock strategic potential, whether it’s through a tech committee, an advisory group, the audit committee or the full board.

 

To understand what determines effective technology oversight, the EY Center for Board Matters reviewed S&P 500 tech committee charters and proxy statements and spoke with leading directors and tech executives at Fortune 500 companies. Drawing on this material, we highlight market trends, examine some of the challenges and opportunities around governing technology, and present different approaches boards are successfully using.

How boards are handling technology’s growing impact: a range of governance approaches

The board’s role in overseeing technology has expanded significantly with advances in AI and other technologies, along with their associated risks, product innovations and new business models. Leading boards are realizing that traditional approaches may no longer be effective for overseeing the growing complexities of technology.

Typically, the audit committee handles technology oversight because of its broader role in overseeing risk management. However, these committees already have heavy workloads and adding technology oversight could risk overloading the committee. An audit committee might also focus on technology risks without giving strategic opportunity its due. As boards bring in more tech-savvy directors, they may gain the flexibility to consider new approaches, such as creating a technology committee or subcommittee or an ad hoc committee.

Leading boards are finding success with various approaches — each with advantages and challenges — tailored to the unique circumstances of the company and the board.

Governance approaches to overseeing technology

Full board oversight

This approach may work at technology companies if it is fully integrated into all relevant items on the board agenda or if all board members have a deep understanding of technology and no separate forum for deeper discussions is needed.

 

However, some technology company directors suggest that a dedicated technology committee can help the board delve deeper into specific areas, such as competition, emerging technologies, and cybersecurity, without overloading the full board meeting. Conversely, non-technology company boards might opt to make technology oversight a full board issue. For instance, an industrials board dissolved its technology committee and reassigned those responsibilities to the full board, highlighting the strategic importance of technology and the growing interest among all directors in overseeing technological capabilities and protecting intellectual property.

Integration with a standing committee

This often works best when tech concerns align with existing agenda items. It also depends on the committee’s bandwidth to add new responsibilities.

 

An insurance company director noted that while some peers have technology committees, the director’s board chose not to after discussing it during annual evaluations. The board found that existing committees were managing tech oversight responsibilities effectively. For example, the audit and risk committee oversees technology risk, the finance and investment committee oversees digital transformation investments and the corporate development committee oversees technology-related mergers and acquisitions.

Standing up a technology committee

Creating a technology committee allows for in-depth discussions between directors and management on tech issues, which is beneficial for boards whose existing committees are already at capacity and where certain directors have relevant expertise and interest. One director at an electric utility company mentioned her board formed a technology committee to dive deeper into industry disruptions. This move helped the company shift from viewing technology as mere infrastructure to seeing it as a strategic differentiator for long-term competitive health.

 

However, setting up a technology committee can increase the burden of coordinating activities across committees and demand more time and resources. It can also be challenging to unwind once established. One board addressed this by creating a technology committee with a sunset clause, triggering its dissolution after it fulfilled its mandate of overseeing several strategic technology integrations.

Other approaches

Subcommittees, ad hoc committees, working groups and advisory boards are structural alternatives that may aid technology oversight. These may also provide temporary support during a specific period of transformation or serve as a test case for a more permanent committee.

 

As proof of concept, one financial services company’s board started a technology task force consisting of three directors who met monthly with the CIO. After a year, it transitioned into a formal committee to strengthen its authority and address how technology oversight might be perceived by regulators. Another financial services board, seeking a temporary solution during a large transformation, hired external advisors to engage with management and advise the board throughout the project, helping directors understand the risks involved.

How large-cap boards are responding: two key trends

Based on our review of S&P 500 proxy statements and technology committee charters, two technology governance approaches stand out.

1. Adding a technology committee: one in seven large-cap boards has one

The share of S&P 500 boards with technology committees has nearly doubled, from 7% in 2018 to 13% in 2025. However, the path for each board varies, reflecting sector-, company- and board-specific factors.

Technology committees are most common in financial services companies (22%), followed closely by information technology (20%) and health care (19%) companies.

At S&P 500 companies, technology committees generally oversee risks, strategies and opportunities, but their charters show significant variation in scope, responsibilities and detail.

Different sectors emphasize distinct areas of oversight. Financial sector technology committees often focus on strategy, trends and investment decisions. In contrast, information technology sector committees primarily address cybersecurity, probably because the full board handles technology strategy. Health care technology committees usually concentrate on the adoption and impact of emerging technologies.

Share of S&P 500 companies with a technology committee, by sector


2. Expanding existing committee oversight responsibilities

Most S&P 500 companies have expanded the purview of existing committees — usually the audit committee — to include specific aspects of technology oversight, such as cybersecurity and AI governance.

Nearly all companies (92%) cite cybersecurity among their committee oversight responsibilities in proxy statements. In most cases (75%), the audit committee is the primary committee overseeing cybersecurity. This differs from the financial services sector, where 42% of boards assign cybersecurity risk oversight to the risk committee, and in utilities, where a third assign it to a compliance committee.

The share of S&P 500 companies specifically citing AI among committee responsibilities has more than tripled over the past year, rising from 6% to 20%. In most cases, AI oversight matters have been assigned to the audit committee, followed by technology, risk, compliance, nominating and governance, and others such as finance or sustainability.

Selecting the right approach: what to ask and discuss

Decisions on board structure and committee responsibilities are ultimately up to each board, typically led by the nominating and governance committee. These choices significantly impact management time, board calendars, and board and committee composition. Therefore, these decisions require careful consideration. The following board conversations can help facilitate meaningful discussions and guide boards in choosing the most effective approach for them.

Executive insights: what technology leaders want from boards

Technology leaders want boards to engage strategically, clarify risk tolerance and offer oversight without micromanaging. Recent insights from our discussions with chief information officers, chief technology officers, chief development officers and chief information security officers highlighted four consistent expectations for effective board involvement in technology strategy.

For more on what’s on the minds of technology executives, read the takeaways from a roundtable with CIOs.

Download a PDF version

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Summary 

Boards need the right expertise and coordination to oversee technology strategies and risks. Having a technology expert may help, but all directors should stay business-focused and pursue ongoing training. Committees must clarify their roles, coordinate discussions and ensure responsibilities are well documented and aligned. Regular evaluation of operations, resources and committee bandwidth is critical to adapting to changing oversight needs, avoiding duplicated efforts and ensuring effective board governance of technology across all relevant committees.

About this article

Authors

  • Lee Henderson
    EY Americas Center for Board Matters Leader
  • Jamie Smith
    EY Americas Center for Board Matters Investor Outreach and Corporate Governance Director
  • Barton Edgerton
    EY Americas Center for Board Matters, Corporate Governance Research Leader

Contributors

Related topics
EY Center for Board Matters

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