Unlocking a New Chief, the CAIO
Why reporting lines determine whether AI optimises the past or shapes the future.
Warwick Peel, Partner, AI & Tech, Amrop Carmichael Fisher
AI has moved from the server room to the boardroom. It is no longer just an efficiency tool; it is a market-shaping force. Yet many organisations continue to place AI leadership under the CIO, limiting innovation and obscuring risk.
The stakes are measurable: companies with AI-savvy boards outperform peers by 10.9 percentage points in return on equity, according to recent MIT Sloan research. But realising this advantage depends on leaders with the mandate and access to act. To reshape markets, we must redesign the org chart, starting with the newly appointed CAIO.
Part 1: The Global CAIO Talent Signal
The reporting line isn't just an organisational detail, it's the single biggest factor in attracting top AI talent. My colleague Kee-Yeon Kim at Amrop Korea recently led a search for a global CAIO at a major conglomerate. What she discovered mirrors a pattern I'm seeing globally: the best candidates simply won't report to the CIO.
Why? As Orla Glynn, an AI Board Advisor in Australia, puts it: "The CAIO should report to where the organisation's real decisions are made, not where the technology sits. AI is now a leadership question, not a technology one."
This isn't about ego. It's about the mandate and the ability to act on it. Dr. Eric Orlowski from AI Singapore frames the challenge clearly, "A common problem with enterprises today is that they have unclear ideas about how AI should be implemented, often boiling down to 'do AI', so a clear vision with authority to enforce it is critical."
The Product Mindset vs. The Infrastructure Mindset
Modern CAIOs are product leaders, not infrastructure managers. They need the autonomy to disrupt the company's own business model, something a CIO, tasked with stability, naturally resists. You cannot hire a disrupter and ask them to report to the person responsible for stability.
Kim observes from the Korean market: "Most non-tech companies find themselves in a situation where most executives cannot make decisions about what their company possesses, what it lacks, what it needs to prepare, and what it must do going forward. The role of the CAIO is to concretely explain and persuade stakeholders about what we need to prepare for in environments where AI agents collaborate with humans."
When the CAIO reports to IT, AI is confined to internal optimisation. When the CAIO reports to the CEO, AI drives innovation and generates external value.
Part 2: The Boardroom Imperative, Moving Beyond Digital to AI Savvy
Here's where organisational structure meets financial performance. MIT research reveals a stark shift: by 2024, 72% of large company boards met the 2019 definition of "digitally savvy," but this no longer correlated with superior performance, as digital literacy had become a baseline requirement
The new differentiator? AI savviness. Only 26% of boards are savvy in advanced AI and emerging technologies, and these companies dramatically outperform peers, not just marginally, but by double-digit percentage points in return on equity, and sometimes even 30% greater market cap.
But here's the critical insight: AI-savvy boards need AI-empowered executives to act on their strategic vision. A CAIO buried three levels down cannot effectively brief the board, cannot shape enterprise strategy, and cannot execute the bold moves that create this performance premium.
Dr. Cornelia Walther, with 20 years at the UN and Founder of ProSocial AI, articulates the European perspective on this imperative: "The Chief AI Officer must report directly to the highest level of the company to provide a perspective that is as candid as it is holistic. This creates a vital, independent 'watchdog' within the C-suite, ensuring the organisation avoids the twin traps of speculative hype and untamed productivity."
"The Chief AI Officer must report directly to the highest level of the company to provide a perspective that is as candid as it is holistic." Dr. Cornelia Walther, Founder of ProSocial AI
Part 3: Speed Requires Steering, The Triangle Governance Model
Here’s the tension: a CAIO reporting only to the CEO brings momentum without oversight. The Board’s AI Committee provides essential guidance and control, ensuring that speed is matched with strategic direction in an environment of constant change.
Based in the US, Supheakmungkol Sarin, Co-Founder of AI Safety Asia and former UN and World Bank advisor, articulates why this dual accountability matters: "The CAIO should report directly to the CEO, with a formal governance channel to a board committee, because frontier AI concentrates outsized upside (growth, productivity, new business models) and hard-to-predict enterprise risk in the same decisions and systems. This is critical to preserve the independence to pause or constrain unsafe deployments and to rapidly evolve controls as regulation, safety science, and geopolitics shift."
The Monthly Mandate — Triangle Governance
I propose a triangular governance model, the CAIO reports administratively to the CEO but maintains a formal, monthly one-on-one with the Chair of the Board's AI/Technology Committee.
The MIT research validates this approach: successful boards focus on three key areas; strategy (analysing AI opportunities and threats), defence (protecting against cyber risks and ensuring compliance), and oversight (ensuring acceptable data use and tracking value creation). A monthly pulse check enables all three far more effectively than quarterly subcommittee cycles.
Why monthly? The quarterly subcommittee cycle is too slow for AI development. A monthly conversation enables the Board to distinguish between hype and hazard; marketing claims versus algorithmic bias, data privacy or IP risk.
The CAIO becomes the translator who converts technical debt into board-level risk, and board-level ambition into technical, new business model roadmaps.
Kim emphasises this point: "Since AX (AI Transformation) is a project requiring significant investment, achieving results is difficult without full executive support. Therefore, establishing a structure where the AI organisation, reporting directly to the CEO, can influence the entire organisation is paramount."
Part 4: Beyond ROI, Return on Values
Walther pushes the conversation further, challenging the metrics themselves: "Beyond efficiency, the CAIO acts as the firm's moral compass, transforming AI into a catalyst for social dividends. The goal is to move past traditional ROI toward a 'Return on Values'; a quadruple bottom line that harmonises people, planet, profit, and purpose."
This European lens is particularly relevant as regulation tightens globally, particularly the most robust EU AI Act. The CAIO reporting directly to the CEO, with board oversight, can champion this expanded mandate in ways a CIO-subordinate role simply cannot.
Orlowski raises an important caveat that deserves attention, "The CAIO role needs to be clearly defined in terms of mandate so as to not disrupt CTO, CIO, etc. roles, and it also needs to avoid becoming overly politicised."
This is where the triangle model proves its value. Clear reporting to the CEO establishes authority. Clear accountability to the Board prevents role creep. Clear boundaries with existing technology leaders (CTO, CIO) ensure collaboration, not competition.
The CAIO isn't replacing these roles, they're orchestrating them toward a unified AI strategy that balances commercial ambition with ethical imperatives.
"The CAIO role needs to be clearly defined in terms of mandate so as to not disrupt CTO, CIO, etc. roles, and it also needs to avoid becoming overly politicised." Dr. Eric Orlowski, AI Singapore
Conclusion: Authority, Accountability and Ambition
Glynn concludes with perhaps the most compelling summary: "If the CAIO reports too far down the organisation, AI will optimise the past instead of shaping the future. AI only creates value when authority, accountability and ambition sit together, that's why the CAIO must sit at the top table."
The MIT research proves this isn't aspirational, it's financially material. The organisations that win in the next decade will be the ones that get this structure right. They will empower the CAIO to drive revenue (CEO alignment) while ensuring robust ethical oversight (board alignment).
The technology bar for board effectiveness keeps rising. Only boards staying current with AI and emerging technologies are driving superior performance. But those boards need an executive partner with the authority, access and autonomy to translate strategic vision into competitive advantage.
It’s not just about hiring the right person. It’s about creating the structure that empowers leadership to deliver lasting impact.
Warwick Peel leads the emerging AI practice for Amrop Carmichael Fisher in Australia. Having studied AI strategy and ethical AI governance at MIT in 2018, he’s also previously Co-Founder of Generative Boardroom and GAIAI, Global Responsible AI Assembly.