Hong Kong’s executives are ‘ill prepared’ for AI era, report finds

A recent report by Grant Thornton Hong Kong reveals that executives at the city's largest listed companies are severely underprepared for the AI era. The firm's 15th annual Corporate Governance Review, which surveyed 100 major firms on the Hang Seng Composite Index, found that only 1% of directors have specialized skills in artificial intelligence or cybersecurity. Despite this lack of expertise, 59% of companies consider cybersecurity or AI as their top business risks.

Only 11% of companies have established dedicated board committees to manage these digital threats and technology integration. This situation has persisted despite the introduction of stricter corporate governance codes by the Hong Kong Exchanges and Clearing (HKEX) last year, which included mandatory director training and stricter limits on board independence.

Grant Thornton's Barry Tong, head of advisory, noted that while overall disclosure quality on HKEX has improved, there remains a significant disconnect between acknowledged risks and the technical expertise at the top. Only 0.56% of directors have cybersecurity expertise and just 0.26% possess specialist AI skills.

The report also highlights that boards remain largely designed for an era focused on capital allocation and traditional risk, leaving them ill-prepared for autonomous AI systems and increasingly sophisticated cyber threats. Nearly 37% of board seats are still filled by executives with traditional backgrounds in finance, accounting, business, and economics.

Female representation among directors has slightly improved to 22%, but it still lags behind European benchmarks of 34 to 40%. Tong urged companies to leverage the upcoming refresh of board independence, which introduces a hard nine-year cap on independent non-executive director tenures, to recruit digital talent and mitigate vulnerability to operational disruptions and investor scrutiny.