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AIPROPX ReportForbes · 2h ago
Why Luxury Boards Need Stronger AI Governance Now
Leadership Strategies Why Luxury Boards Need Stronger AI Governance Now By C200 ,
Forbes contributors publish independent expert analyses and insights. We are female leaders committed to advancing women in business. Follow Author Jul 30, 2026, 10:10am EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Summary The luxury industry, historically slow to adopt new technology, is now lagging in AI risk protection. Drawing lessons from fintech, fashion leaders should strengthen vendor due diligence, assign clear ownership for AI oversight, build consumer trust into product design and treat every AI partnership as a liability decision. Delaying action can lead to regulatory exposure, reputational damage and lost consumer confidence. Luxury boards need stronger AI governance to evaluate AI investments responsibly.
AI adoption is accelerating, but trust and governance are not keeping pace. More than 85% of luxury consumers use general-purpose AI tools, including ChatGPT, Perplexity and Gemini, at least occasionally, according to McKinsey research . That level of adoption creates new opportunities for companies, but it also raises questions about how much consumers are willing to trust these tools with their decisions and personal information.
The answer is mixed. 55% of consumers distrust AI recommendations, according to Vogue’s survey of 250 Vogue, Vogue Business and GQ readers in the UK, the US and Europe. This hesitation becomes even more pronounced when money and sensitive information are involved. In the same survey, 72% said they would refuse to share their card details with an AI tool.
The challenge extends beyond the fashion industry. It is a governance problem facing any board evaluating an AI investment, technology partner or consumer-facing tool. Only 17% of organizations exceeding $500 million in annual revenue say AI governance is overseen by their board of directors.
The luxury industry in particular “has a cautious history when embracing new technologies. The sector was late to ecommerce, for example, fearful that the internet would dilute its reputation of exclusivity and mystery,” writes Christopher Aaron Blackmon for the Financial Times , and he is right.
I recently spoke with my colleague Louis Grassi, who is a Director of finance for the world’s most renowned luxury houses. We discussed to what extent luxury houses are financially planning for mitigating changes in technology, risk and AI and it was shared that although sensitivities on regulatory direction and enterprise risk concerns are more present in Europe, for example in Italy at the corporate-level of the Italian houses, the urgency is not yet prioritized at their US subsidiaries. Even still, while some awareness in the EU is present, my colleague confirmed that governance-adjacent conversations are more early-stage than what we previously witnessed in the financial sector.
Fin-tech became secure because verification, protection against liability and enforcement were built into the industry's foundations. It wasn’t a marketing tactic to gain consumer trust, but one to regulate industry-movement and technological development from the ground-up.
I know this because with a background in defense and high-trust technology, contributing to security in finance was a critical focus in my career. I previously built ForceX, a company in defense ISR, which is one of the least forgiving, most male-dominated technical sectors there is. With that knowledge, I became an investor in fashion tech. My early conviction was the product of a cross-disciplinary read on where fashion technology was heading and what it was going to need to get there.
Expertise in tech and cultural fluency in fashion, an industry I have long been involved in as both a consumer and advisor, assured me that fashion would become an accelerating industry. At the same time, I also knew it was an under-governed one. I was certain fashion, and what would become fashion tech, had the potential to become one of the most consequential sectors of the decade but it needed individuals with my background to steer it in the right direction for sustainable growth. It is an industry where reckless, unregulated deployment is a commercial and reputational liability. This was a distinctive read most investors, overwhelmingly men, didn’t have at the time that I did.
In his same Financial Times piece from early July, Christopher Aaron Blackmon asks the question “what will be the reaction to AI adoption by heritage houses?”. My answer: I hope its governance adoption. Most assume AI adoption means the consumer-facing side, like the craftsmanship, design integration and AI in creative exploration, but the real urgency is internal: company protection and governance. Drawing on my experience in high-trust industries, here is what fashion leadership and boards more broadly, should prioritize when evaluating AI investments, partnerships or vendors.
Require AI vendor due diligence before any partnership is signed, including how the vendor handles data, what its models were trained on, and how liability is allocated if the system fails or causes harm.
My commitment to fashion, and the industries I serve, is to address the security gaps that the industry has yet to name. In practice, this translates to applying defense-grade accountability frameworks to this emerging technology sector. It is to flag AI risk, highlight its urgency and say: fashion!…wake up and act before it's too late.
Delaying action carries real risk. It means weaker oversight of external investments, greater exposure to vendor and data risk, regulatory problems, reputational damage and loss of consumer trust. Boards need enough technology literacy to evaluate AI-related investments and partnerships responsibly.
Tracy Guarino is a technology executive and entrepreneur with a background in defense-grade software, cybersecurity, fina...
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