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Artificial intelligence (AI) and corporate governance: Evidence from board size

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  • Chatjuthamard, Pattanaporn
  • Jiraporn, Pornsit
  • Lee, Sang Mook

Abstract

We examine the effect of board size on the adoption of artificial intelligence (AI)-skilled employees, a critical determinant of firms’ ability to leverage AI technologies. Board size, a crucial dimension of board governance, plays a pivotal role in shaping strategic decision-making and a firm’s adaptability to technological change. Using a novel dataset by Babina et al. (2024) that identifies AI-related roles through advanced textual analysis of resumes, we utilize the share of AI workers in firms over time. Our findings reveal that smaller boards significantly enhance the integration of AI-skilled employees. Specifically, a reduction in board size by one standard deviation increases the share of AI workers by 8.4 %. Interaction analyses show that smaller boards are particularly advantageous in R&D-intensive firms and those with substantial cash reserves. Smaller boards also result in greater variability in AI workforce integration, reflecting their capacity to foster flexibility, and adaptive learning in dynamic environments.

Suggested Citation

  • Chatjuthamard, Pattanaporn & Jiraporn, Pornsit & Lee, Sang Mook, 2026. "Artificial intelligence (AI) and corporate governance: Evidence from board size," Journal of Behavioral and Experimental Finance, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:beexfi:v:49:y:2026:i:c:s2214635026000067
    DOI: 10.1016/j.jbef.2026.101144
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    Keywords

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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