Autor: Alfredo Enrione – Director del Centro de Gobierno Corporativo y Sociedad
Picture this boardroom scene playing out across Latin America right now: A seasoned director, successful in traditional industries for decades, confidently approves a $50 million AI transformation initiative. They’ve never used ChatGPT, don’t understand machine learning, and think “prompt engineering” is a construction term. Yet they nod authoritatively as management presents slides filled with acronyms like NLP, MLOps, and LLMs.
Welcome to the most dangerous theater in modern governance: digital pretense.
The Expertise Illusion
A recent study by McKinsey found that 73% of Latin American board directors admit to approving technology investments they didn’t fully understand. Even more concerning: 89% believe their fellow directors wouldn’t admit their own digital knowledge gaps.
This creates what behavioral economists call “pluralistic ignorance”—everyone assumes everyone else understands, so no one asks clarifying questions. The result? Boards making billion-peso decisions based on collective ignorance masked as individual confidence.
The Cultural Amplifier
Latin America’s hierarchical business culture amplifies this problem. Admitting ignorance can be perceived as weakness, especially for senior directors whose authority rests on decades of experience in “traditional” business. The generational gap becomes a knowledge chasm when 60-year-old directors evaluate technologies designed by 30-year-old engineers.
Consider the typical tecnológica board presentation: Management knows that directors won’t understand the technical details, so they focus on impressive metrics and industry buzzwords. Directors, sensing their knowledge limitations, default to trusting management’s expertise. Everyone leaves feeling satisfied, but no one has actually governed.
The Silicon Valley Mirage
This dynamic is particularly dangerous when Latin American companies try to copy Silicon Valley practices without understanding the underlying technology. We’re seeing boards approve “AI strategies” that are really just automation projects with sexier names, or “digital transformation” initiatives that amount to expensive software purchases.
The result is what I call “innovation theater”—companies going through the motions of digital transformation while missing its substance.
Building Digital Governance Literacy
The solution isn’t turning directors into programmers. It’s building digital governance literacy—the ability to ask the right questions even without technical expertise.
Three practical approaches:
The Explain-to-Grandmother Test: Require management to explain any technology investment as if presenting to someone who’s never used a smartphone. If they can’t, they don’t understand it well enough themselves.
The Show-Don’t-Tell Rule: Demand live demonstrations of any proposed technology. It’s harder to hide behind buzzwords when you have to show actual functionality.
The Second-Opinion Protocol: For major tech investments, require consultation with an external expert who reports directly to the board, not management.
The Latin American Innovation Opportunity
Here’s the paradox: Latin America’s “late adopter” status could become a competitive advantage. While Silicon Valley companies iterate rapidly through trial and error, Latin American firms can learn from others’ mistakes and implement proven solutions more thoughtfully.
But this requires boards that understand the difference between being fast followers and blind followers.
Reflection Questions for Your Board:
- Can each director explain your company’s AI strategy in simple terms?
- When did you last see a live demonstration of a technology you were asked to approve?
- Do you have independent technical advisors, or do you rely solely on management’s tech expertise?
P.D. The next time someone presents an AI strategy to your board, ask them to show you the actual technology in action. Their reaction will tell you everything you need to know about whether you’re looking at innovation or illusion.
