AI reshapes organisations faster than government ‘can keep pace with’, leaders say

With patchy AI sentiment across APAC, Australia’s government seeks to position the nation ahead of its regional peers, as the fraught geopolitical environment continues to move the playing field.

AI confidence rings high in the Asia-Pacific (APAC) region – but who is standing out, and for how long?

Heidrick & Struggles revealed that business leaders in APAC demonstrated the highest degree of confidence in managing AI risks compared to other regions, according to its 2026 APAC CEO & Board Confidence Monitor.

According to the survey, 50 per cent of business leaders in the region are confident in their organisation’s ability to manage and handle AI – 11 per cent higher than the global average.

The annual report, which collected responses from 254 leaders across the region, also found that AI and economic uncertainty topped the leadership agenda as the most significant organisational issue, with cyber security posing a secondary risk.

What stood out, however, is that numbers plummet when looking at governance and future leadership readiness.

According to the partner-in-charge at Heidrick & Struggles Singapore, Jiat-Hui Wu: “The breadth of what is landing on leadership agendas across APAC right now is significant. The real test for leaders is carrying the weight of today’s volatility while simultaneously transforming for what comes next.”

As reported in HR Leader, the federal government recently identified energy and job sustainability as a priority as Australia escalates AI usage.

The report, titled Expectations of data centres and AI infrastructure developers, outlined the development of data centres as a central factor of its National AI plan, which was released in December of last year, and signalled the government’s intention to keep Australia competitive in the AI race.

According to Deloitte Access Economics, AI infrastructure investment could generate more than 14,000 jobs a year and $133.6 billion to the economy by 2050 – but only if Australia moves quickly.

Other APAC countries – including Japan, India, Thailand, and Malaysia, which have invested billions into AI infrastructure, are the region’s current emerging AI hubs.

If digital infrastructure can be satisfied by other countries, Australia may, according to experts, miss out on the productivity and economic benefits, as well as lose the chance for AI policy sovereignty.

As a region, APAC countries demonstrated a weakness in governance. According to the Heidrick & Struggles report, confidence falters when considering mechanisms designed to position organisations for the future.

Only 55 per cent of the surveyed business leaders expressed confidence in their board evaluation and refreshment practices, and only 54 per cent were hopeful regarding CEO succession planning processes.

The regional managing partner of the CEO and board of directors practice for APAC and the Middle East at Heidrick & Struggles, Guy Farrow, highlighted that “confidence in today’s leadership is just part of the picture”.

“Even as organisations grow more confident in managing technological risk, a more uncertain geopolitical environment is testing leadership readiness,” Farrow said.

“Organisations need to strengthen governance and ensure they are planning effectively for the next generation of leadership.”

Clearly, this message applies to countries hoping to rank higher in the AI race – and for Australia, this may mean breaking away from regional trends and growing confidence through measured governance practices.