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AI is Here to Stay
“Most organizations have to evolve to embrace AI. I don’t think we have a choice. Every business, city, and entity has to deal with this. Embracing this as a board is a no-brainer because it’s here to stay. We cannot put this genie back in the bottle.” — Paroon Chadha
Discussing AI Now Will Push You Ahead
According to a survey taken during the webinar, 59% of boards have not discussed AI yet. Thirty-three percent have had conceptual conversations about it, and only 8% have been reviewing it to integrate it into the business strategy. None have integrated it into board governance operations.
How Does This Impact the Immediate Future?
Boards need a work plan regarding AI policy questions, ethics questions, how AI is being used already, if they will use it in the budgeting or strategy processes, and if AI is disrupting their markets.
Webinar recap: OnBoard Co-Founder and CEO Paroon Chadha, Independent Auditor Susan Stenson, and OnBoard’s Chief Product Officer Martyn Chapman discuss the effect artificial intelligence (AI) will have on boards in the future.
As artificial intelligence (AI) sweeps across the world and changes the way people access information, companies and boards of directors must understand how it will affect their organizations. According to OnBoard Co-Founder and CEO Paroon Chadha, aside from the advent of the Internet, AI is the biggest technological change in tech in recent history.
But what does your board need to do to prepare for it?
Earlier this month, Paroon, Independent Auditor Susan Stenson, and OnBoard Chief Product Officer Martyn Chapman joined us for our most recent ATLAS Leadership Series webinar. They discussed the benefits, opportunities, and threats of AI in the next 12 months, three to five years, and the next decade.
What is AI?
Paroon explained that technology has finally been able to harness and crystalize all of human knowledge, everything documented at least, and make it available in a format that humans and systems can query. It allows us to ask very specific questions and get intelligent answers. Since the role of a board is to maximize opportunities and minimize harm, boards are rightfully trying to understand how AI will affect their organizations in the near and long term.
AI in ‘Now’ Frontier
In the next 12 months, boards will start to talk about AI and analyze how it will change their organizations and business models.
Stenson believes the first thing that needs to happen is a massive ramp-up in education around AI. “I think most boards don’t even have a common understanding of what AI is, let alone how it might apply to their organization or how it might already be disrupting their organization and their industry,” she said.
Susan recommends implementing an education program for the board because once AI is deployed, boards need to start thinking about ethics and policies and operationalizing those things quickly. Since board time is limited, she advised an all-encompassing briefing outside regular board meetings, especially if the organization’s business model could be threatened.
There’s also an immediate opportunity for boards to use AI to improve the information they’re getting, leading to better decisions. Still, there also needs to be policies to ensure the integrity of the information. “There’s a real urgent conversation that needs to happen there because, from what I see, AI has the potential to massively improve very quickly the information that’s being presented to boards,” Susan said.
Martyn believes “responsible AI” will become a term people hear much more commonly in the boardroom in the coming years. He presented 4 key questions boards should be asking about AI-related risks.
Security and AI
Security is definitely a concern for boards, especially if board members were to copy sensitive information into ChatGPT or Google Bard
“When you are using ChatGPT or Google’s Bard, you’re contributing to those models, and whatever document you upload or information you share, that could be available elsewhere to someone else.” Paroon said.
To mitigate this risk, organizations can create their own environments using services like Microsoft Azure or OpenAI, and the interactions with the AI model are all contained within their personalized environments.
Boards should also update their policies to include information about using publically available AI agents like ChatGPT or Bard.
In the next two to three years, AI could be used to augment or assist boards in various ways. Martyn believes innovation is critical, and innovative boards should be recruiting innovative leaders across the organization, investing in innovation, and be part of a company’s long-term strategy.
Paroon gave advice to boards who aren’t sure if AI will cause a disruption in their industry. “See what your competitors are doing,” he said. “Are they hiring people for AI? If they are, you might want to think about what’s causing that.”
From an operation standpoint, boards should look at how AI can be used in summarization. For example, how can information be put into an AI model to help a director prepare for a meeting to expand their knowledge or experience? Additionally, it could assist new directors. The technology could give the new director three relevant pieces of information discussed in the year prior and provide contextual information to the board.
Susan agreed that summarization would be very helpful. “As a former corporate secretary, I empathize with the pain of writing board minutes, and it’s absolutely a priority to use AI to improve that, she said. “There’s masses that can be done very quickly.” She believes boards already get too much information, and AI could help enhance the most relevant points.
From a risk standpoint, Stetson says more time is being dedicated to people talking about the workforce and people strategy (whether that’s talent shortages, impending recessions, or economic constraints on people). “Right now, there’s anxiety around people feeling like they’ll be replaced by AI, and that needs to be incorporated as part of your people strategy from a risk and opportunity standpoint.”
When it comes to predicting the future, Susan and Paroon had disagreeing views on the topic. Susan believes AI will not replace board directors in the long term because the human qualities of judgment and empathy are essential for board directors. “I’ve yet to be convinced that we will see them in AI effectively, and those are key qualities for effective board directors, so I’m not sure we’ll get that far,” she said. However, she thinks companies will use information and data much more effectively to improve decision-making in the boardroom.
Paroon has seen examples of countries appointing AI as ministers and advisors and a venture capital-based firm in Singapore that has appointed AI on its board. While these are outliers, he does believe AI will help eliminate biases
“Currently, in the boardroom, there’s hardly any representation of all generations,” he said. “These models are going to allow us to dial up and dial down the collective wisdom of a certain segment of the population.”
Martyn believes AI will affect board regulation. While people have been looking at regulation in terms of other digital transformations like social media, he believes boards will now need to create policies around AI misuse.
Is your board thinking about AI? OnBoard has some exciting features to leverage conversation AI in your own secure environment. If you want to learn more, contact us today!
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