The report, titled Driving innovation: the boardroom gap, which was prepared in partnership with the Australian Institute of Company Directors (AICD), says board members are too often focused on short-termism and traditional risks to their organisations.
While 75 percent of company directors surveyed believed their organisation had an innovative vision or said innovation featured in their strategic vision, almost half admitted that momentum was lost over time.
Nearly 60 percent of directors were unaware of the percentage of their organisation's total expenditure that was allocated to R&D and innovative activities.
Business School researcher, Dr Massimo Garbuio, said it was clear that "several companies are too short-term driven, being driven primarily by shareholder needs, and there is not enough investment in R&D and Innovation when compared to OECD counterparts."
"I was surprised to find that only three per cent of the directors said they brought science and technology experience or international experience to their board," Dr Garbuio said.
"Many may need to upskill in order to understand the impact of new technology for their companies and how to use them to compete in a global marketplace."
With 57 percent of directors not knowing how much they spent on R&D and innovation, Australian boards are clearly not doing enough in comparison to other national and international businesses.
"If Australian businesses want to compete, they can't just follow what is done elsewhere, they need to lead. Customers have choices.
"We live in a world in which it's often easier and faster for a customer to buy something from a US website and get it shipped than to buy it from a local retailer that hasn't been able to effectively integrate digital and non-digital channels," Dr Garbuio said.
Based on the outcome of his study, Dr Garbuio has recommended that board members have "two strategic conversations."
"First is a conversation about the need to truly understand customers' needs today as well as their needs in 5 or 10 years time. Second is a conversation about resource allocation. Are we investing enough today in order to be relevant and thrive in 10 years' time?" he said.