Credit: London.Edu
London Business School’s Leadership Institute recently hosted a Next Generation NED Network event entitled ‘Safe and Sound: AI/Digital Risks and Opportunities’, which looked at the boardroom considerations associated with the fast-paced world of artificial intelligence.
Karen Bach, CEO at IX Acquisition Corp, Non-executive Chair of measurable.energy and Darren Chapman, Founder and Chairman at CyberScale Ltd explored the ethical dimensions of AI and digital advancements, examining both the risks they pose and the opportunities they present.
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The discussion, which was moderated by Charles Mayo, General Counsel at Secure Trust Bank and Chair of the Next Generation NED Network, began with whether all business needed to become ‘AI-enabled’ to remain competitive. The discussion then addressed pressing questions such as how Boards can navigate the ethical complexities inherent in AI and digital technologies, the strategies NEDs can employ to leverage innovations while mitigating associated risks, and how to ensure that ethical considerations remain at the forefront of decision-making processes.
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It was obvious from the discussion that there is no business that can avoid having AI in one way or another, and that Boards need to be deciding when and how quickly to address AI. Given that it is the Board’s role to guide management to assess the use, opportunities and risks of AI. Non-executive directors in attendance were advised to query what use their organisations are making of AI at the moment (both officially and unofficially), the potential uses of AI, what the problems are that their company is trying to solve with AI, rather than examining the universe of AI applications.
The sorts of questions NEDs can ask management about AI uses/opportunities are:
What use are we making of AI?
What are all the potential uses we could make of AI?
What’s the problem we are trying to solve with AI?
What are the opportunities for us to use AI?
How is AI affecting our competitive landscape?
Digital advancements are happening at pace and the Board’s role in monitoring this is vital because things are changing so fast. In addition, not all Board members understand what AI is so there is an educational piece required to allay fears by explaining what AI is, what it can do and what it can’t do.
While there are clear benefits to AI, such as the speed and volume at which work can be done, ethical concerns remain, particularly around the use of AI in healthcare and people-related decisions.
Important considerations for Boards are the impact on employees in terms of jobs becoming redundant, directing the business to have an appropriate hiring practice in place for AI expertise, and considering who gets access to organisational data. Boards need to consider what guardrails need to be put in place and what training needs to be given. After all, hackers have access to the same technology, so while AI has the potential to be completely transformative, Boards need to be aware of the risks just as much as opportunities.
Charles Mayo concluded the meeting with this proposition: AI is no different from the Board’s role on other matters, in that he said:
A successful company is led by an effective and entrepreneurial Board (it must be true: the Governance Code says so).
Directors must understand the business (there is law about this).
Directors should be entrepreneurial and willing to take and manage risks to promote the success of their organisation (there is also law about this).
The Board sets the strategy.
The Board identifies the principal risks and establishes/maintains the risk management and internal control framework.
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