In a growing suburban school district, administrators introduce a new dropout prevention initiative, fueled by artificial intelligence. The analytics tool was designed to identify students at risk of falling behind academically. The tool collects data from attendance records, grades and even disciplinary issues to flag students who might need additional academic support.

The advantages of the new system seem clear at first: Teachers can intervene earlier, helping reduce the dropout rate and improving academic achievement for students. However, as the AI system begins generating recommendations, questions arise.

Teachers notice that the tool disproportionately flags students from lower income neighborhoods. Parents wonder about how their children’s personal information is being used and stored. The school board begins to understand that they need a clear process for evaluating the AI model’s fairness, transparency and alignment with community values.

The district’s leaders face a dilemma: how do they balance innovation with ethical responsibility? How do they ensure that their use of AI improves outcomes 

 perpetuating inequities or undermining public trust?

 and city governments to healthcare systems — are turning to AI to increase efficiency, predict needs and make better decisions. But as these tools grow more sophisticated, they also raise difficult questions about accountability, bias and oversight.

The question for today’s public leaders is no longer 

Board management software like Diligent Community helps public sector organizations create and sustain 

governance structures for responsible AI oversight

 to make public services more efficient and responsive. Yet without guardrails and guidelines, AI can pose risks to organizations that can erode public confidence and amplify inequities.

 AI models can reflect societal or data-driven biases, which, if not recognized, lead to unfair decisions and treatment.

 The internal workings of AI systems are often difficult to understand, even for their creators. This makes it difficult for officials and citizens to understand how AI comes to its conclusions.

 When AI influences critical decisions — such as student placement, benefits eligibility or hiring — it must be clear who is responsible for those decisions.

 The vast amount of sensitive data in the hands of public entities makes ethical and secure data use essential.

To address these risks, school boards and 

 must create AI governance guidelines with clear policies, processes and oversight procedures that ensure ethical use of these new technologies. But doing so requires the right tools to operate and monitor them effectively.

Lead responsible AI use in education. Download our guide for key principles, ethical strategies, privacy best practices, and monitoring tools.

Navigate AI governance easily

. Board management software like Diligent Community enables public sector organizations to place ethical principles into everyday processes.

With Diligent Community, organizations can:

Diligent Community provides a structured environment where boards can adopt AI governance checklists and guidelines. From early planning to operation and review, every decision and document can be captured in one secure, accessible place.

The Policy Publisher feature helps manage the entire lifecycle of AI-related policies, from creation and digital voting to adoption and publication. Version control and history tracking provide a clear audit trail, reinforcing accountability and compliance.

AI programs evolve rapidly. Diligent Community’s tools allow boards to document and track AI-related discussions, decisions and results. Agendas and minutes are stored in the document library, making it easy to measure progress, revisit past decisions and demonstrate accountability.

Annotation tools such as highlights, sticky notes and private comments enable members to stay engaged and prepared for discussions on AI ethics and oversight.

Public trust is built on visibility. Diligent Community’s Livestream Manager empowers organizations to stream meetings on their public websites alongside agendas and supporting documents. Meetings can be recorded and paired with time-stamped minutes, allowing members of the public to identify discussions around AI oversight.

AI-assisted minutes can also be generated quickly from livestream transcripts, ensuring accuracy and saving administrative time.

The platform’s public website integration ensures compliance with open meeting laws and ADA requirements, offering transparent access to agendas, policies and past decisions — while keeping data secure.

Align AI use with organizational goals and community values

AI initiatives should always reflect the organization’s mission and community values. Diligent Community supports this by streamlining communication and decision-making. Secure updates, tracked approvals and custom workflows help ensure that AI decisions and outcomes are documented and aligned with board goals and objectives.

Support onboarding and continuous learning

Ethical AI governance is an ongoing process. Diligent Community’s centralized document library simplifies the onboarding of new trustees and staff, ensuring that training materials, governance policies and reference documents are readily available. A powerful search function allows users to quickly access relevant information, reducing time wasted hunting through emails or outdated files.

Diligent Community is designed for the public sector, helping boards and administrators lead with integrity and transparency. Its cloud-based design, secure servers and 256-bit encryption ensure that sensitive discussions and documents remain fully protected.

Diligent Community helps public entities:

Implement and monitor AI governance frameworks.

Document and track decisions with transparency.

Align AI initiatives with community goals and ethics.

AI offers promise to improving public services but only when guided by strong ethical governance. As organizations navigate the challenges of implementing AI responsibly, Diligent Community provides the tools and structure to lead with transparency, accountability and trust.

By combining technology with ethical leadership, public sector boards can ensure that AI serves the public good — fairly, responsibly and in agreement with community values.

 to explore how Diligent Community can help your organization strengthen ethical AI governance.

How public boards can develop better AI governance with smarter tech

It was a case of Canada dry for proxy contests in the first six months of 2025. But as the year slipped into its second half, more activist situations headed to a vote, accounting for all but one of the board seats won since the end of June. 

Diligent Market Intelligence (DMI) data show that the 10 seats secured by activists in H1 were through settlement as investors and Canadian boards navigated market flux and looming tariffs under the Trump administration. 

However, as confidence slowly returned in the latter half of the year, the change in tone saw activists secure seven seats via special meeting votes, representing 39% of all seat gains in Canada in the first 10 months of the year.

 “After a period of uncertainty or caution, when the picture brightens, or at least is clarified, you are likely to have some activists waiting in the wings, ready to strike,” Aaron Atkinson, partner at Davies, told DMI. 

The tendency to work toward finding terms in H1 followed a tumultuous 2024 where key lessons were learned, according to Jon Feldman, a partner at Goodmans. 

“There were some extremely contentious fights that went the distance and the learning from that experience (on both sides) is that if you can get to the end with minimal pain in a way that is fair and reasonable, then everybody wins," he said. 

One of the more acrimonious contests in 2024 played out at Gildan Activewear, where the clothing company's entire 12-person board resigned to make way for the eight nominees put forward by Browning West with its CEO Vince Tyra also stepping down to be replaced by former top boss Glenn Chamandy. 

Indeed, Browning West has since maintained its focus on CEO succession having reached a February agreement with aerospace and defense company CAE that saw the activist’s co-founder and partner Peter Lee named as one of four new directors and tasked with headhunting a new CEO. 

Other settlements inked at Canada-based targets this year saw legal software provider Dye & Durham give a board seat to Plantro, an activist fund headed by its former CEO Matthew Proud. Plantro has continued to agitate for change, however, in October moving to withdraw its acquisition proposal while also reevaluating its 11% ownership position in the company, where Engine Capital’s Arnaud Ajdler is chair. 

Starboard Value was also represented in the share of settlements, securing a seat for its Senior Partner Gavin Molinelli at Algonquin Power and Utilities as it extended a pact agreed in April last year – the U.S.-based activist’s maiden foray north of the 49th parallel. Molinelli’s accession to the board kicked in as Rod West started his term as the new CEO. 

“Companies and activists are both realizing that direct discussions are in their best interests, as opposed to proxy contests that are time-consuming and costly for both sides,” said Victor Li, executive vice president, governance advisory, at Kingsdale Advisors. 

But while settlements proved the hallmark for the opening half of the year, by the end of October, some activists had changed tack to secure seven seats through a number of key special meeting votes. 

Chief among these wins was a September 16 special meeting staged at drilling fluid chemicals company Bri-Chem, with around two-thirds of votes cast backing the quartet put forward by Cenatex’s Barry Hugghins. 

A month before that, an activist coalition fronted by Ljubo Mikulic succeeded in revamping the board of Lincoln Gold Mining with two seats gained in a campaign focused on the miner's management and capital strategy. 

While activists have interchanged tactics and adapted their approach to suit changing market conditions over the past 10 months to deliver some headline wins, there has been a notable chill in overall activity in the market with many opting for a behind-the-scenes approach in a bid to avoid a costly and disruptive board battle. 

Just six companies were targeted by primary- and partial-focus activists in the first 10 months of the year, down from nine in the same period of 2024 and a peak of 16 in 2023. 

That slowdown has translated into a 36% drop in board seats gained compared with the first 10 months of last year. According to Goodmans’ Jon Feldman, boards have learned to get ahead of the curve. 

“Well-seasoned activists, particularly those who have a track record of success and who are prepared to go the distance are finding that boards are doing what they can to reduce the risk of a protracted and costly proxy contest.” 

For now, buoyant share prices and steadier business performance have taken some of the oxygen out of activism. But few expect the lull to last. “Activism is generally a function of poor performance. For now, business seems to be going relatively well and share prices are up. That could change on a dime given macroeconomic issues and if so, could lead to more [activism],” noted Feldman.

IN-DEPTH: Activists switch tactics to gain ground in Canada

Ten insights shaping boards in the year ahead

Boards entered 2025 facing rising risk, economic volatility, and an urgent mandate to modernize oversight. At Diligent, we recently hosted the Elevate Leadership Summit, a by‑invitation gathering of corporate directors and executives alongside a curated set of experts, for confidential, Chatham House Rule-style discussions to dissect these issues and look to the future of corporate governance.

Across sessions, a clear through‑line emerged: the most effective boards are shifting from moving from passive oversight to active, data‑driven governance with disciplined processes and human judgment at the center. Here’s what our expert speakers and experienced director attendees had to say about the trends to watch out for in 2026:

1) From passive to active GRC—augmented by AI

Active GRC is replacing passive oversight as directors confront increasing risk and low confidence in near‑term conditions. Speakers suggested augmenting teams with AI agents to handle foundational tasks and “ask the next question,” freeing leaders to focus on strategy amid resource constraints.

2) AI governance: Measure what people actually do 

The biggest AI risk isn’t only technical, it’s invisible usage. AI governance should incorporate real usage metrics, not just periodic sentiment surveys, and pair cultural encouragement (safe experimentation and knowledge‑sharing) with “lighthouse” projects that prove measurable value to employees and shareholders.

3) Culture oversight is expanding and needs better data

Board oversight of culture has outgrown legacy tools. Public trust continues to concentrate on employers and brands, and employees increasingly make choices based on societal beliefs. Activism is rising, and many boards still haven’t discussed company stances on social issues. Our speakers discussed the possibility of utilizing a broader range of anonymized unstructured data - such as employee intranet messages and chat data - into decisio useful insights, while ensuring individual employees aren’t being singled out or retaliated against for escalating concerns.

4) AI literacy and security remain non‑negotiable

Boards need AI literacy and strong cyber foundations; there’s no leapfrogging weak security into trustworthy AI. Keep a human in the loop, test for bias systematically (using available benchmarks), and consider experimenting with smaller models and improved licensing terms where they fit the use case and data‑governance needs.

Early red flags require pre‑defined protocols, not improvisation. The first 72 hours following a crisis event should trigger escalation playbooks, evidence preservation (including email freezes), independent counsel where appropriate, and non‑retaliation toward whistleblowers, all paired with board‑level visibility and documented independence.

Continuous monitoring (increasingly AI‑enabled) can surface fraud risk indicators earlier, narrowing the expectation gap around what audit and compliance actually do.

6) Speak‑up culture is a strategic asset

A speak‑up culture with higher hotline usage is a positive signal, but only if organizations close the loop, protect anonymity, and report metrics to the board. Leaders should be encouraged to normalize and celebrate reporting, which reduces fear and builds trust across the enterprise.

7) Board-executive dynamics are shifting under scrutiny

Executives are pushing for director refreshment, and more of them see boards overstepping compared to last year. Meanwhile, CEO turnover is up, with most U.S. departures described as unplanned. These themes raise the premium on preparedness, role clarity, and disciplined engagement between boards and management.

8) Succession planning must be continuous and robust 

Effective succession planning should be continuous and discussed at every meeting, with directors knowing the pipeline at least one level down and preparing for unexpected transitions – including mission-critical roles beyond the CEO.

The board chair’s (or independent lead director’s) role in tone‑setting and inclusion is pivotal. Boards can benefit greatly from periodic third‑party evaluations to raise effectiveness.

9) Executive compensation is evolving amid volatility

Executive compensation committees are recalibrating discretion, which allows boards to award compensation based not only on results, but qualitative assessment. COVID‑era lessons showed shareholders tolerate discretion in executive compensation when the rationale is strong and disclosure is clear.

Executive security as part of the compensation package is rising as a governance and risk issue; Policy and regulatory discussions happening at the SEC point to potentially simpler disclosures as early as the 2027 proxy season, while state‑level rules are reshaping proxy‑advisor practices.

10) Better questions and diverse composition strengthen oversight

Directors who ask, “What do I need to understand?” and “Do I have all the information?” sharpen risk oversight. Building formal and informal trusted channels with audit and compliance leaders can improve signal quality, while targeted training helps boards recognize fraud indicators. Evidence that boards with a broader range of perspectives are more effective highlights the value of having a well-balanced and diverse composition.

The year ahead will reward boards that operationalize judgment: clear protocols for crises, richer data streams on people and culture, pragmatic approaches to compensation, and step‑wise AI adoption that starts with the reality of how employees are using it. The common denominator is disciplined curiosity. The best directors will ask better questions, measure what matters, and adapt faster.

If these insights resonate with your board or leadership team, consider a structured review of your speak‑up mechanisms, succession playbooks, culture data sources, and AI governance metrics to ensure they’re meeting today’s pace of change. Then, pick one “lighthouse” initiative to prove value within the next two quarters and use the learning to scale.

Note: The Elevate Leadership Summit is an annual, by‑invitation gathering of corporate directors and CEOs, alongside a curated set of experts, for confidential, Chatham House Rule-style panel discussions.

Top board trends in 2026

This article originally appeared in our November 6 edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe

Cyber threats, AI disruption, and geopolitical instability are reshaping the audit landscape — and 4,000 audit leaders across 131 countries have weighed in. Whether you’re on the internal audit team, serving on your board’s audit committee, or working in partnership with them, the IIA’s 2026 Global Risk in Focus report has insights for you. This year’s edition reveals the key risk areas
to focus on and highlights how risk is changing across regions and sectors (with tips on how to achieve compliance with updated 

2026 Global Risk in Focus: Top risks for internal audit (Cybersecurity, AI, Geopolitics)

 remains the number one concern for organizations worldwide, with 73% of respondents naming it a top five risk. 

pronounced in North America and Europe, where more

than 80% of organizations put it at the top of their list.

, has seen the second largest jump in perceived risk with an increase of 9 percentage points year-over-year. Organizations are racing to implement new technologies,
but many are running into infrastructure and skills gaps.

3.Geopolitical uncertainty leapt 10 percentage points 

globally, now ranking sixth overall. North America saw the sharpest spike (up 19 points), driven by shifting U.S. trade policies and global conflicts.

4.Business resilience (47%) and human capital (43%) round out the top global risks.

 Organizations are feeling the pressure to shore up supply chains and crisis response capabilities. Meanwhile, talent shortages, wage competition, and generational shifts keep human capital risk firmly on the agenda. 

 Regulatory change (41%) is closely linked to geopolitical risk. Where political uncertainty is high, regulatory challenges follow.

How audit committees can close the risk-to-audit gap

I asked Curtis Warfield, experienced public company director, Audit Committee Chair, and former Chief Audit Executive, his thoughts on bridging the risk-to-audit gap. He outlined five steps:

“As an Audit Chair, I see the gaps as driven by limited expertise in emerging areas like AI and digital disruption, audits taking longer than planned, and the need to balance enterprise-wide coverage with limited resources.” says
Warfield. 

“It’s a risk–reward trade-off,” he goes on. “Sometimes management also has major deliverables in progress, which limits timing for audits. Audit committees can help by understanding these constraints, supporting skills development, and encouraging dynamic adjustments to the plan when new or fast-moving risks emerge.”

“Internal audit should not just police — it should partner,” says Warfield. “The key is alignment with senior leadership so internal audit can help ensure technology risks are managed without slowing innovation.” He adds, “Audit leaders should focus on being strategic partners, not just reviewers, and work closely with the business to embed technology risk considerations into
transformation projects from the start.”

Audit committees add the most value when they understand the process behind the audit plan. “Members should take time to learn how the ERM process connects to strategy and how audit allocates time across the risk
profile,” advises Warfield. “That understanding makes it easier to have meaningful dialogue about priorities. Regular communication and progress updates help keep the plan dynamic and aligned with emerging risks.”

4.Support advisory work while maintaining independence

“Tone at the top is critical,” Warfield emphasizes. “The audit committee and board chair can reinforce that internal audit’s role is not to police management, but to be a strategic partner while maintaining independence. It’s a delicate balance — audit must still provide objective assurance, but it can also offer valuable advisory input on AI governance,

, or scenario planning. Clear boundaries and communication make both roles possible.”

5.Build an agile, forward-looking partnership

Agility starts with alignment. “Everyone should understand the audit process, how it ties to enterprise risk and strategy, and how resources are deployed,” says Warfield. “The audit committee should be willing to adjust its agenda
throughout the year for new risks and ensure flexibility in hours and resources to respond to change. That’s how audit and the board can stay proactive and effective in uncertain environments.”

Looking to stay ahead of the curve on audit governance? Check out the 

IIA’s new Center for Audit Committee Leadership. 

The Center offers audit committee members tailored strategic advice, best practices, and educational resources to help ensure internal audit functions are effectively structured and integrated within your organization’s governance framework.

Diligent

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How public boards can develop better AI governance with smarter tech

IN-DEPTH: Activists switch tactics to gain ground in Canada

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