Ethical and business responsibility of Boards in an age of AI

AI is radically reshaping the business landscape in profound ways. It’s more than automation. AI can optimize processes, work with big data, and generate insights, which in turn facilitate smarter decision-making. AI can enhance efficiency, reduce costs, and even create new business models. It’s like having a super-smart business partner that can handle repetitive tasks, analyze vast amounts of data, and suggest strategies for growth.

So, what is the role of boards in governing AI responsibly?

I asked this question to Michael Barrett, Director of Blue Lily who is shifting his IT business into the realm of advising business leaders on ethical, and responsible oversight of AI.

Michael stresses that the better the question we ask AI, the more useful, relevant and ethical will be the answer provided.

Let’s see what Michael had to say:

“AI introduces new risks around ethics, bias, security, liability and more. Boards of directors now face the crucial responsibility of providing effective oversight of AI development and deployment to balance opportunity with responsible governance. This oversight challenge is compounded for boards of multinational corporations navigating varying regulations across regions.”

Michael stresses that boards must elevate AI governance as a central priority. He recommends a dedicated committee focused on monitoring AI innovations, strategies, risks, and metrics.   AI board committees can “develop recommendations on AI priorities, investments, policies, and risk management for the full board’s review.”

Board Directors need maturity and ongoing growth.

The facility with which the committee does this will depend on their level of adult brain development.  As the US Senate Judiciary Committee hearing, “Big Tech and the Online Child Sexual Exploitation Crisis,” reveals, IT and business brilliance may lead to huge social harm.  To get their heads and hearts around, not only the business value of AI to their companies, but also ethics and social responsibility, demands wisdom, technical and business smarts.  This means any Board committee must not just do the technical job well but must also act as mature business elders.

The kind of directors needed for AI board committees will understand AI ethics, data science, emerging technologies and their societal impacts, cross-border regulations, and human resources management in a digital environment.  The value of their perspective will be shaped by their level of human consciousness.  Subject matter experts from academia or non-profits focused on responsible AI can inform the board’s oversight role but it is the board itself that must stretch its maturity, thinking and wisdom.  The wellbeing of our society depends on it.

Evaluating Risks and Metrics Holistically

Michael tells us that: “Boards generally rely heavily on monitoring financial performance. But overseeing AI requires a more holistic view. The board should work with management to identify key performance indicators related to responsible AI development across the company. Metrics may include:

• Pace of innovation and new AI-driven offerings
• Sentiment regarding AI and ethics among employees
• Adherence to internal AI principles and values
• Assessment of potential biases or risks in AI systems
• Cybersecurity incidents related to AI data or applications
• Compliance with evolving regulations on AI governance”

He stresses that Boards need to ensure they are getting relevant regional data around AI’s impact on “employee displacement or retraining needs, community response, alignment with cultural values, and legal restrictions or incentives.”

He goes on to say “In addition to these internal metrics, the board must stay apprised of emerging risks and liabilities by monitoring external research on AI and connecting with civil society groups focused on AI ethics. Ongoing legal counsel should inform the board’s understanding of liability exposure related to AI systems as governance standards continue to evolve across jurisdictions.”

Fostering an Innovation Mindset with Ethical Guardrails

Effective AI oversight requires striking the right balance between enabling innovation and managing risks.

Michael advises: – “The board and management should collaboratively develop a set of guiding principles for accountable AI development across the company. These principles may emphasize priorities such as:

• Protecting privacy and security of user data
• Ensuring fairness, transparency, and accountability in AI systems
• Mitigating harmful biases through continuous testing and monitoring
• Considering the broad societal impacts of AI innovations
• Aligning AI solutions with the company’s stated values and purpose
• Maintaining responsible partnerships and practices throughout the AI supply chain

Ideally these principles will shape an ethical, organizational culture where employees feel empowered to innovate while upholding key values. The board can assess whether management’s policies and incentives are cultivating this culture.”

This is a collective leadership responsibility and may require not just coaching in responsible AI practice but in leading from higher levels of consciousness to ensure that the corporation’s leaders have sufficient breadth of thinking to balance the complexity of issues, the speed with which the environment is changing and the transparency (and relationships) to ensure that the right strategy is both formulated and implemented at rapid speed.

AI oversight is a long-term commitment.

Michael advises: – “Rapid advances in AI will continue posing novel risks and opportunities for the foreseeable future. Therefore, boards should view AI governance as an ongoing imperative requiring sustained focus, expert input, and continual learning. Companies just beginning to pilot AI applications may need time to develop comprehensive oversight frameworks. Laying that groundwork positions the board to adeptly evolve its governance approach as deployments scale.”

Boards that proactively tackle this multifaceted responsibility to oversee AI ethically and effectively will help their companies safely navigate disruption. Those that neglect this duty potentially allow uncontrolled risks and missed opportunities. Prioritizing responsible AI now and in the future ensures businesses remain innovative, competitive, and aligned with societal values.

Written by Margot Cairnes.

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