Artificial Intelligence (AI) will transform how we learn new information, analyze data, develop intelligent solutions, and enhance industries from health care to transportation.
That said, AI in the boardroom can complicate matters if boards don’t use it correctly.
GPT-4 by OpenAI and its information model, ChatGPT, allow users to comb through vast amounts of data in far less time. Before boards use AI, though, they should understand the benefits and challenges of implementing AI in the boardroom.
AI models analyze large swaths of information much more quickly than humans can. By thoughtfully using AI in the boardroom, boards can achieve the following:
- Better decision-making: The ability to easily access information from everywhere enables board members to make better decisions.
- Improved governance: With AI available to quickly review and summarize essential information, now board members can spend more time on better governance and overall board processes.
- Centralized information: AI technology can help your board can enjoy the ease of having all its data in one place.
- Efficiency: Modern boards host virtual meetings, share information with new technologies, and use AI to develop agendas.
- Data-driven focus: AI analytical models can provide valuable insights on what’s working well, what could be improved, and how to improve focus areas.
- Protection from risk: AI’s predictive modeling and machine learning help predict risk, which can promote the growth of your organization.
AI in the boardroom has its downsides, too:
- Mistakes happen: The information AI presents may lack validity and board members should always verify it.
- The software doesn’t come equipped with ethics: AI doesn’t have morals or values. You must infuse ethics into your AI practice, or legal consequences might arise.
- Don’t give AI sensitive information: AI chatbots aren’t secure communications channels. This can harm the stakeholders you serve and violate confidentiality.
- AI isn’t regulated: Boards must understand the compliance and regulatory requirements within their market. Set clear use cases around AI that honor these regulations.
Navigating the Winds of AI Change: A 5-Point Framework
If you’re considering implementing AI in the boardroom, you need to consider the risks. But this doesn’t just mean assessing problems and running from them. Weigh the costs and benefits of using AI using this 5-Point framework:
- Ethics: Boards must consider AI’s ethical implications and risks before using it.
- Bias: AI users must understand that any information it provides could contain bias and errors.
- Accountability: Your organization must clearly explain how it used AI in its decision-making process. Appoint a leader who’s accountable for all decisions made by AI.
- Responsibility: More than 86% of businesses surveyed use AI without the board’s knowledge. Board members should provide guidelines to ensure the organization uses AI responsibly.
- Cybersecurity: Organizations must take steps to detect and assess cyber threats through AI the same as other technologies. They should also put guideposts for adoption in place, like determining if new technology has proper certifications and an encrypted board portal.
AI in the Future
The relationship between AI and boards is still in its infancy. AI tools promise to deliver next-level intelligence, but we can’t yet predict how they will affect your organization.
If implementing AI in the boardroom feels daunting, consider taking small actions that will familiarize you with AI’s capabilities and open the door to use it more prominently in the future.
Here are some low-risk ways to use AI for beginners:
- Ask ChatGPT to review a document and provide the most important points.
- Create board meeting agendas or formulate meeting summaries.
- Review cybersecurity risks
- Summarize meeting materials.
- Analyze financial data.
- Automate board scheduling.
Should AI Have a Seat on the Board?
Some boards might consider including an AI board member to attend meetings and provide insights. While this may seem outlandish, consider the possibilities of a position that could analyze lots of data and assist the board in strategic thinking.
AI in the boardroom can’t replace the human element. Your board members bring a sense of values, ethics, and confident decision-making abilities. AI can’t do that.
Boards shouldn’t fear or avoid the advent of AI. Instead, evaluate AI at the same level as other areas of investment.