Plain-language definitions of the terms, frameworks, and liabilities shaping how boards oversee AI. Written for directors, not engineers.
AI Board Governance CompassFrameworks & Tools
Vela's proprietary assessment. It maps board readiness across 16 indicators and four dimensions, scored 1–5 with criticality weighting, and produces a governance record of where a board stands. The AI Board Governance Compass →
The Four DimensionsFrameworks & Tools
The axes the Compass measures: Individual, Board, Organization, and Stakeholder. Together they cover director readiness, collective oversight, executive alignment, and outside expectations. The four dimensions, in full →
Board SimulationFrameworks & Tools
An immersive scenario that puts directors inside a live AI governance decision before the real one arrives. Vela's catalogue includes The Green Light, a live AI deployment proposal. Board simulations →
A director's legal obligation to act in the company's best interests, encompassing the duties of care and loyalty. AI decisions now fall squarely within it. From Oversight to Accountability →
Standard of CareLiability & Law
The level of diligence expected of a reasonable director. For AI oversight, that standard is being redrawn in real time by regulators, insurers, and courts. From Oversight to Accountability →
Caremark DutyLiability & Law
The Delaware doctrine holding directors liable for failing to put in place, and then monitor, systems to catch mission-critical risks. AI is fast becoming a Caremark risk. From Oversight to Accountability →
AI WashingLiability & Law
Overstating what a company's AI actually does. Directors who approve misleading AI claims can face personal exposure under securities law and fiduciary duty. AI Washing: How Boards Can Spot It →
EU AI ActLiability & Law
The European Union's risk-based AI regulation. Its obligations can reach the boards of any company operating in the EU market. AI regulations and standards →
SEC AI DisclosureLiability & Law
Securities-law expectations that AI-related statements to investors be accurate. Misstatements approved by the board create director exposure. AI regulations and standards →
D&O InsuranceInsurance
Directors & Officers liability cover. Many AI-related governance failures fall into gaps boards assume D&O already covers. The Insurance Handoff →
E&O InsuranceInsurance
Errors & Omissions, or professional liability cover. One of the towers that may dispute who owns an AI-related loss. The Insurance Handoff →
Cyber InsuranceInsurance
Cover for cyber incidents. In an AI failure, cyber, D&O, and E&O insurers can each argue the loss belongs to another. The Insurance Handoff →
Coverage GapInsurance
The space between insurance towers where an AI loss is claimed by none. Identifying it before an incident is a governance responsibility. The Insurance Handoff →
OversightGovernance Practice
The board's active monitoring of management's AI decisions, distinct from managing AI directly. The core of the director's role. How the Compass measures oversight →
AI LiteracyGovernance Practice
A working, director-level grasp of AI: enough to ask the right questions and judge the answers. The Compass measures it at the individual level. How the Compass measures literacy →
Escalation PathwayGovernance Practice
A defined route by which AI risks reach the board, with clear thresholds for what surfaces, when, and why. The Five Questions →
Bias TestingGovernance Practice
Checking an AI system for unfair or discriminatory outcomes. Boards are rarely told what testing happened before deployment, and rarely know to ask. Bias, Testing, and Board Responsibility →
AI Deployment ReviewGovernance Practice
A structured governance check before approving an AI system: the questions and red flags that separate defensible oversight from a liability gap. The Five Questions →
From vocabulary to oversight.
The Compass turns these terms into a scored picture of where your board stands. Request a briefing to see how.
