Published on the 14/04/2026 | Written by Heather Wright
In the AI era, finance brains still dominate boards…
As AI, cloud and cyber risk reshape every sector, Australian companies are still putting major technology calls in the hands of boards dominated by accountants, lawyers and career executives.
New research shows more than half of ASX-listed boards have no directors with STEM expertise – a gap that has barely shifted in 15 years. The research, published in the Journal of Accounting Literature, shows Australian boards are more comfortable reading balance sheets than code, despite years of digital transformation and the rapid arrive of generative AI.
“Firms with greater STEM board expertise are associated with higher levels of innovation investment and firm value.”
The study, STEM Expertise in Australian Boardrooms: Trends and Impact on Firm Outcomes, examined the backgrounds of directors at the top ASX-listed companies in 2007 and 2022. Over that 15 year period, the share of board seats held by directors with STEM (science, technology, engineering and mathematics) expertise rose from 8.4 percent to just 12.9 percent. More than half of those boards had no STEM-qualified directors at all by 2022.
Meanwhile directors with background in accounting, banking and law filled around 42 percent of board sets, with former CEOs and other c-suite executives accounting for a further 35 percent. Even in sectors with a high level of technical and innovative activities, such as IT, the materials sector and healthcare, STEM directors were outnumbered by directors with financial and executive expertise, with 27 percent of IT and materials boards comprised of STEM directors, and 24 percent of healthcare.
It’s a trend also seen in the Australian Institute of Company Director’s 2025 Board Diversity Index, which showed Australian boards were continuing to appoint a ‘significant proportion’ of people with accounting and financial background – with just 7.7 percent having a tech background.
In short, the boardroom remains dominated by financial and governance specialists – a structure that has proven stable, consistent and not especially technical, or innovative.
Innovation and value benefits
According to the research, co-authored by Natalie Elms and Aeshesha Weerasinghe from Queensland University of Technology and John Nowland from Illinois State University the lack of STEM expertise does have an impact on business both in terms of investment and value and in limiting cyber risk exposure.
“Firms with greater STEM board expertise are associated with higher levels of innovation investment and firm value,” the research article says. “These effects are strongest in firms without STEM CEOs and in industries with lower STEM representation.”
When STEM representation exceeded 26 percent, companies were found to have invested significantly more in innovation than those where STEM expertise was below 25 percent.
The trio argue that appointing directors with STEM background may offer a competitive advantage, and recommends policies and initiatives to expand the supply of STEM directors.
The findings arrive as boards face rising accountability for technology-driven decisions, from AI investments to cyber resilience and data governance. Directors are expected to test management assumptions, evaluate technology risk and sign-off on digital strategy, even if many have never worked directly with the systems being discussed or with modern software systems.
“In Australia, the need for boards to leverage digital technologies and oversee technological risks has become a pressing issue. A national survey of corporate directors shows that 21 percent of organisations have no digital transformation strategy, while 41 percent report that fewer than one-quarter of their board members possess technology skills, and 13 percent have no technology skills.”
At the same time, cybersecurity, cyberattacks, data governance and staff technology capabilities have been identified as among the most critical risks organisations are facing, with directors in the firing line of regulators for failing to prepare and respond to cyberattacks appropriately.
“Directors with expertise in STEM are particularly well positioned to influence technology-driven innovation and, consequently, firm value.”
The study links this skills gap directly to measurable outcomes – ‘a positive and significant relationship’ between the number of STEM directors and corporate innovation investment. “This suggests that, although STEM directors comprise only a small percentage of the total director pool, their influence on innovation is significant.”
While not arguing for replacing accountants with engineers – financial, legal and governance skills remain fundamental for all businesses – the researchers note that without sufficient technical expertise, boards may struggle to interrogate major technology investments, assess risk trade-offs or challenge management assumptions, particularly in fast-moving areas like AI. (The report looked at 2022 director details, pre-dating the AI surge of the last few years.)
“Their cognitive capacities and technical expertise enable STEM directors to identify, assess, and respond to technological opportunities and risks, thereby enhancing their advisory and monitoring roles in relation to innovation and technology strategies.
“This is supported by our results, which show a positive and significant association between STEM director representation and both corporate innovation investment and firm value. Notably, these effects are strongest in firms without STEM CEOs and in industries with lower overall STEM representation, suggesting that STEM directors help fill a critical gap in firms’ innovation strategy and capabilities.
Kiwi mirror
New Zealand boardrooms appear to be grappling with a similar tension. The New Zealand Institute of Directors’ Director Sentiment Survey 2025 shows technology and AI have moved firmly into the governance mainstream, with 38.5 percent of directors identifying AI and digital acceleration as a top strategic issue and more than 60 percent of boards working with management on how technology can lift productivity.
At the same time, confidence in capability is lagging ambition. Fewer than half of New Zealand directors believe their board has the right skills to manage increasing business complexity and risk. The survey also shows easing attention to formal board evaluation and skills review, even as expectations around digital oversight accelerate.
The New Zealand IoD does not prescribe professional backgrounds for directors and the survey does not single out STEM expertise. However, a 2019 survey, cited by the New Zealand Institute of Directors, found just three percent of directors surveyed had science or technology expertise and the data highlights a widening gap between what boards recognise they need to govern and how confident they are that current capability matches that task.
The STEM Expertise authors stop short of calling for quotas or wholesale board upheaval. Instead, they argue for expanding the pipeline of board-ready directors with STEM backgrounds and recognising technical expertise as a governance asset, rather than a specialist add on.
For now, the numbers tell a simple story. Technology is shaping company performance faster than board composition is adapting.
