The rapidly changing business environment and evolving best practices for corporate governance are reshaping the agenda of the board committee responsible for companies’ people – or “human capital.”  The human capital committee (or similarly named body) is typically charged with overseeing workplace and compensation-related issues and policies, primarily relating to the company’s non-executive employees. Its responsibilities have been steadily expanding over the last decade, reflecting changes in government policy and developments in a host of other areas: workplace safety, employee well-being, remote work, anti-harassment protocols, codes of culture, recruitment, retention and succession practices, and benefit design.

More recently, the human capital committee’s agenda has been affected by technological evolution—particularly artificial intelligence and similar models—and its impact on labor markets, employee hiring and displacement, and organizational hierarchies. Recent media headlines lay out the committee’s technology-related challenges, from dramatically changing job markets to weakening workplace culture to increasing employee job responsibilities. Pope Leo XIV’s recent encyclical on “Safeguarding the Human Person in the Times of Artificial Intelligence” adds concepts of worker dignity and social justice to the agenda.

From a corporate governance perspective, this extraordinary level of disruption has made the human capital committee a critical component of the board’s overall practice, creating new challenges and duties for directors. These duties are grounded in governance’s fiduciary responsibility for human capital and a positive workforce culture. While management must address day-to-day workforce matters, the board has a role to play. For example, thought leadership from organizations such as the National Association of Corporate Directors (“NACD”) ( ) promotes close board monitoring of the potential workforce impact of corporate technology deployment.

To this point, NACD encourages boards to ensure that such deployment augments rather than replaces human capabilities. This is consistent with the views of Wachtell Lipton Rosen & Katz founding partner Martin Lipton that “boards should consider in a balanced manner the effect of technological adoptions on important constituencies, including employees and communities, as opposed to myopically seeking immediate expense line efficiencies at any cost.”

These perspectives suggest the following strategies for the human capital committee.

Expanded Agenda Items. The regular committee agenda should be expanded to include greater responsibility for workforce oversight. This would include monitoring management’s ability to shape an agile workforce that can effectively respond to technological change.

A prominent new task would be for the committee to monitor or otherwise consult with management before any material AI-related worker displacement can proceed and whether efficiency should be a factor in that displacement. Another task would be to collaborate with management on retraining and improving the skills of employees affected by AI. The committee may also work with management on retaining senior employees with the experience, judgment, and values necessary to supplement the gaps in AI systems.

Other AI-associated issues relate to preserving a positive workforce culture. This might include the “loyalty” concern; i.e., the extent to which, given AI pressures, employees maintain the level of trust and engagement with their duties necessary to assure the company stays competitive. A similar concern is the impact on workforce culture of repeated messages on the potential for AI-related displacement.

The committee may also be concerned with the extent to which AI is used in employee hiring, and if so, at what levels. AI’s role in recruiting is controversial and certainly within the realm of governance scrutiny.

Information Flow. Other new committee tasks could include adjusting the scope and frequency of management-to-committee information flow. This might include more news reports relating to employment implications of AI; notable private sector decisions regarding employment and displacements; comments and projections of prominent executives; specific levels of government and private sector-generated labor and employment statistics and analysis; and relevant legislative and regulatory developments on both the state and federal levels (e.g., California Governor Gavin Newsom’s new AI workforce-related Executive Order.

Structural Considerations. The full board should consider whether the committee’s charter, composition, and staffing need upgrading. The charter may need to be amended to cover the new tasks expected of the committee. Similarly, there is value in reviewing whether the existing authority granted to the committee—either advisory capacity or board-delegated—is sufficient. Certainly, the composition of the committee, e.g., the number and perspectives of members, should be reviewed. In addition, the committee should consider the value of having a representative of the general counsel’s office and outside counsel serve as staff.

Communications. The committee will want to regularly monitor proposed internal and external communications addressing new technology-related workforce issues. Great sensitivity is expected in communications relating to worker obligations, workforce displacement, and unique issues pertaining to young and older workers. As the media has reported,  harsh, insensitive, or dehumanizing management comments on employment status and opportunities can severely harm workforce culture.

With the duties and responsibilities of the board’s human capital committee facing such seismic and rapid change, it’s high time that the board and executive leadership focused on ensuring that the committee is up to the challenge.

Michael W. Peregrine is a retired attorney and a fellow of the American College of Governance Counsel.