AI Is Already on the Balance Sheet.

Artificial intelligence is no longer a technology of the future. It is transforming European companies today - reshaping productivity, redefining business models, and creating a new category of governance risk that most boards are not yet equipped to manage. In 2025, one in five EU enterprises used AI technologies in their business operations, up from barely one in seven the year before. The financial impact is measurable, the regulatory framework is tightening, and the gap between companies that govern AI well and those that do not is widening rapidly.

As Executive Board Director of Genius Group Limited (NYSE: GNS), an AI-powered education company operating across 34 companies in more than 100 countries, I see this transformation from the inside every day. The question for boards is no longer whether AI will affect their companies. It is whether they are governing it effectively - and whether they are capturing the value it creates or leaving it on the table.

The scale of AI adoption across Europe

According to Eurostat, 20 percent of EU enterprises with ten or more employees were using AI technologies by 2025 - a 6.5 percentage point increase from 13.5 percent in 2024. That is the fastest year-on-year growth since measurement began.

Fig 01The gap between AI leaders and laggards within Europe is as significant as the gap between Europe and the US.

Large enterprises are adopting AI at significantly higher rates than SMEs, and the productivity benefits are correspondingly concentrated. Research from the European Investment Bank, analysing more than 12,000 European firms, found that AI adoption increases labour productivity by 4 percent on average - with substantially stronger gains for medium and large firms that invest in intangible assets and human capital alongside their AI systems.

The bottom-line impact

The EY European AI Barometer 2025 found that 56 percent of European companies report that AI has either increased their profits or reduced their costs - an 11 percentage point increase from just 45 percent the previous year. In advanced manufacturing, 78 percent of firms report measurable financial gains. In agriculture and agro-industry, 73 percent. The Stanford AI Index reinforces these findings at a sectoral level: industries with high AI exposure are seeing labour productivity grow 4.8 times faster than the global average.

For boards, the implication is straightforward. AI is not a cost centre or an innovation experiment. It is a measurable driver of profitability and competitive advantage. Companies that delay adoption are not standing still - they are falling behind.

The board-level governance gap

Here is the paradox. While AI is transforming business operations and financial performance across Europe, the vast majority of boards are not governing it at all.

Fig 02Board-level AI oversight is the exception, not the rule.

McKinsey's State of AI survey found that only 17 percent of organisations report that their board takes direct oversight responsibility for AI. A further 28 percent assign responsibility to the CEO, but more than half of organisations have no senior-level AI governance at all. Among European large-cap companies specifically, only 20.7 percent had formal AI policies in place; 61.3 percent had no AI policy disclosed at all.

This is not a peripheral risk. It is a governance failure. Companies are deploying AI systems that affect hiring decisions, customer pricing, credit assessments, and strategic planning — and their boards have no visibility into how those systems work, what risks they create, or whether they comply with emerging regulation.

The EU AI Act: a new regulatory reality

The EU AI Act - Regulation 2024/1689 - is the world's first comprehensive AI regulation, and it creates direct compliance obligations that boards cannot delegate or ignore. Since February 2025, AI practices deemed to pose unacceptable risk have been prohibited outright. Since August 2025, general-purpose AI providers must comply with transparency obligations.

Fig 03Most critical deadline: August 2026 for high-risk AI systems under Annex III.

The most critical deadline for most enterprises is August 2026, when compliance requirements for high-risk AI systems under Annex III become fully enforceable. This covers AI used in employment and worker management, creditworthiness assessment, education and vocational training, and access to essential services. Companies using AI in any of these areas must complete conformity assessments, finalise technical documentation, obtain CE marking, and register their systems in the EU database.

The AI Act elevates AI governance to a board-level responsibility. Directors face potential personal liability under corporate law fiduciary duties if they consciously disregard significant regulatory risks. Boards should be receiving quarterly AI compliance dashboards, reviewing vendor contracts for AI Act compliance warranties, and confirming that management has classified all AI systems and implemented conformity measures.

A board that reviews AI risk annually is reviewing it too late. At Genius Group, AI capability and risk are standing items at every board meeting. — From the boardroom

Governing an AI-powered company

I write about AI governance not as an abstract topic but as a daily reality. As Executive Board Director of Genius Group, I have board-level oversight of a company powered by AI - using artificial intelligence to transform education delivery across 34 companies, serving six million users in more than 100 countries.

Governing a company at this intersection of AI, education, and international expansion has taught me several lessons directly relevant to any board overseeing AI adoption:

AI governance must be embedded in business strategy, not bolted on. At Genius Group, AI is not a tool used by one department. It is the architecture of the entire business model. Every board discussion about revenue, product development, or market expansion is inherently a discussion about AI capability, AI risk, and AI compliance.

AI literacy at board level is non-negotiable. The EU AI Act now makes this a legal requirement for all deployers. Directors who cannot understand the basics of how AI models work, where they can go wrong, and what risks they create cannot provide effective oversight. I invested in executive education at MIT specifically to build this competency — covering blockchain technologies, strategy and innovation, and the broader digital transformation landscape.

International AI governance is exponentially more complex. Genius Group operates across more than 100 countries. The EU AI Act, the UK's pro-innovation approach, and regulatory frameworks in Asia each impose different requirements. A board that understands only one jurisdiction is underequipped.

AI creates unprecedented speed of change. The pace at which AI capabilities evolve means governance frameworks must be reviewed far more frequently than traditional compliance cycles allow.

What boards should do now

1. Put AI on the board agenda - permanently. Not a periodic topic. A standing agenda item at every board meeting, with a designated board member or committee responsible for oversight.
2. Conduct an AI audit immediately. Map every AI system your company uses or deploys. Classify each under the EU AI Act risk categories. Identify which systems require conformity assessments by August 2026.
3. Invest in board-level AI education. The EU AI Act requires AI literacy training for all staff who interact with AI systems. Boards should go first — commission briefings, send directors to executive programmes, require AI literacy as a core competency for new NED appointments.
4. Demand an AI compliance dashboard. Management should provide a quarterly dashboard covering: inventory of all AI systems, risk classification, conformity assessment progress, vendor compliance status, incident reports, and upcoming regulatory deadlines.
5. Review all vendor contracts. The Act extends responsibility to any organisation deploying AI supplied by third parties. Confirm contracts include warranties covering compliance, with an exit strategy for vendors that cannot provide evidence.
6. Quantify the opportunity, not just the risk. AI governance is not only about compliance and risk mitigation. Ask management: where are we deploying AI for competitive advantage? What is the measurable financial impact? Where should we invest more aggressively?

The board that understands AI will govern the future

The transformation of European business by AI is not a future event. It is happening now - in the 20 percent of EU enterprises already using AI, in the €6.2 million average profit impact being reported, in the 4.8 times productivity acceleration in AI-adopting sectors. The EU AI Act is making board-level oversight a legal obligation, not just a governance best practice.

Having governed an AI-powered company across multiple jurisdictions, I can say with confidence: the boards that understand AI today will be the ones that govern the future. The ones that do not will find themselves governing the past.