In this article published March 5 on the Directors and Boards website, Michael Chertoff and Allan Grafman detail the risks board members should consider as they navigate the world of AI.
Excerpt: “Artificial intelligence is the biggest “thing” since the Internet in the late 1990s. Companies are excited about the prospects and simultaneously uncertain about how to pursue opportunities and protect against risk.
As executives and front-line management teams are scrambling to understand and apply this new, rapidly evolving, potentially game-changing technology, boards risk falling behind in gaining sufficient expertise to perform their oversight responsibilities effectively.
Companies are beginning to delve into the myriad ways in which AI could potentially improve their business operations while considering the need to balance speed of adoption with careful risk management. The same technology that could revolutionize productivity or marketing, for example, could destroy reputations if deployment, or the underlying technology itself, is flawed.
AI presents a continuously expanding range of challenges and opportunities with which directors need to be conversant and capable of exercising oversight.
Directors need to involve the entire board and the executive team in developing approaches to ensure the board and company are both equipped to conduct diligent governance of the use of AI in their companies.
The following short checklist, which will be dated by year’s end, will assist directors facing opportunities and concerns generated by the propagation of AI.
Employee productivity. According to The Wall Street Journal, “The gap between those using AI for productivity and everyone else threatens to widen into a chasm as we contend with more and more stuff produced by a combination of human minds and machine assistance.”
Studies are showing increased productivity of employees who use AI vs. those that don’t. One such study from Harvard Business School focused on realistic, complex and knowledge-intensive tasks done by 758 Boston Consulting Group consultants divided into two groups. Consultants using AI were significantly more productive, with 12% more tasks completed, 25% more quickly and rated 40% higher quality compared to a control group. Is this type of advantage one you wish to have? Consider AI training for your executives and perhaps much more widely. Larger firms are acting on establishing an AI leader in their executive ranks.
Talent management and human capital. Beyond productivity of your current staff, AI tools are being developed across the entire human capital management continuum: assessing initial candidate fit, performance reviews and employee health and wellness. Reports now abound regarding the use of AI to accelerate timely feedback to employees. Given the sensitive nature of this general area, companies need to think through how the above usage of AI will be received by its employees.
Further, employees need to be instructed to refrain from entering their organization’s confidential information or trade secrets into an AI platform. The absence of such boundaries can lead to breaches of nondisclosure agreements with clients, compromise an organization’s trade secret status or violate data-protection laws. For these boundaries to be effective, “confidential information” must be defined in a thoughtful way that describes what cannot be submitted to an AI tool.”
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