By Carlie Idoine
AI is rapidly shifting from a technical enabler to a core driver of business decisions. This piece explores why executive AI literacy, not just infrastructure or compliance, will determine competitive advantage. Leaders fluent in AI’s risks and potential can govern responsibly, align strategy effectively, and sustain long-term performance.
As artificial intelligence (AI) continues to redefine business strategy, operations, and performance, one increasingly critical capability remains underestimated at the highest levels of leadership: the ability to understand and govern AI itself.
Much of today’s executive focus rests on funding infrastructure, choosing tools, and meeting regulatory demands. But as AI systems begin to influence, if not outright automate, strategic business decisions, success will depend less on the technologies deployed, and more on the fluency of the people directing them.
AI is no longer a back-office enabler. It is becoming a co-pilot for decision-making across pricing, product strategy, supply chain optimisation, customer engagement, and risk management. By 2027, it’s expected that 50 percent of business decisions will be augmented or automated by AI agents. These agents operate at speed and scale, but not always with contextual awareness or human judgment. That’s where executive oversight becomes essential.
From delegation to accountability
For years, AI lived squarely in the realm of data scientists, technologists, and innovation teams. Business leaders focused on outcomes, while technical teams handled model development, deployment, and management. But this model is no longer sufficient.
AI is now shaping core decisions that directly impact revenue, compliance, and reputation. Leaders must shift from passive sponsorship to active engagement. That means asking not just what an AI system does, but how it reaches its conclusions, what data it draws from, and where risks may arise.
Leaders who lack this fluency may inadvertently approve initiatives they don’t fully understand, overestimate what AI can deliver, or overlook critical gaps in governance. In a world where AI’s reach is expanding rapidly, that blind spot is more than inefficient, it’s a business risk.
AI literacy is strategic literacy
Executive-level AI literacy does not require coding skills or technical expertise. But it does require strategic intelligence: the ability to interrogate assumptions, evaluate risk, and align AI deployments with long-term business priorities.
This literacy gives leaders the tools to spot flawed logic, overhyped claims, or narrow use cases that don’t scale. It empowers better decisions about where to invest, how to govern, and when to pull back. It also enhances the quality of dialogue between business and technical teams, ensuring AI isn’t implemented for technology’s sake, but as a clear driver of value.
In organisations where this understanding is in place, the benefits are tangible. Gartner predicts that by 2027, organisations that emphasise AI literacy for executives will achieve 20% higher financial performance compared with those that do not.
From briefings to immersive learning
To build true fluency, executives need more than status reports or vendor demos. They need to engage with AI systems directly, piloting use cases, testing prototypes, and seeing the real-world implications of AI in action.
For example, a supply chain leader might test an AI agent that dynamically reallocates stock based on predictive demand. A marketing executive might use synthetic data to model campaign outcomes without relying on sensitive customer data. These experiences sharpen judgment, surface limitations, and build confidence in decision-making.
Synthetic data is one area that illustrates this well. It offers privacy-preserving innovation and diverse training data but also introduces new risks if not properly managed. Without understanding how synthetic datasets are generated and validated, leaders may find themselves relying on AI models that look accurate but fail in critical ways. Literacy enables the right questions to be asked, before risks materialise.
The governance mandate
As AI becomes deeply embedded in operational workflows, its influence on strategic decision-making is only growing. Boards and C-suites will soon be expected to govern AI with the same diligence applied to financial reporting or cybersecurity.
This requires not just high-level awareness but informed oversight. Within a few years, AI-generated insights will increasingly be used to challenge executive decisions. Leaders who understand how these systems operate, how data is structured, how outputs are generated, and how bias or failure might creep in, will be better positioned to lead with credibility and accountability.
Governance must evolve to include AI as a strategic priority, not just a technical or compliance issue. Executive literacy is the enabler.
A global imperative
While regulatory frameworks differ across regions, from the EU’s AI Act to emerging standards in Asia and North America, the underlying requirement is consistent: businesses must demonstrate not only responsible AI deployment but also competent leadership.
This is not a regional conversation. It is a global shift in expectations for how leaders engage with technology. The companies that lead will be those whose executives are equipped to balance innovation with governance, speed with safety, and experimentation with accountability.
Leading the next phase
The pace of AI adoption will only accelerate. But no matter how advanced the models become, they are only as effective, and safe, as the leadership that guides them.
Executive AI literacy is now essential for building resilient, forward-thinking and high-performing organisations. Those who invest in these capabilities today will be best positioned to harness AI for sustained competitive advantage.
Gartner analysts will further explore these insights at the IT Symposium/Xpo in Barcelona, from 10-13 November 2025.
Carlie Idoine
