There’s a growing divide between boardroom organizations that are well-trained in creative artificial intelligence and organizations that need to play catch-up, notes Florian Rotar, CEO of AI at Avanade.
“I’m a little worried that we’re going to see this building diverge and some will be left behind,” Rotar says in a virtual interview hosted by Rotar. luck In collaboration with Diligent for The Modern Board series.
Avanade, an IT services and consulting firm, has worked with hundreds of organizations and noted in interviews that some meeting rooms are becoming “pretty sophisticated” when it comes to using AI, Rotar says. Some of the use cases that have been implemented include: relying on creative AI to better prepare for board meetings, piloting and prototyping simulated activist investor exercises, and an AI-enabled tabletop exercise to better plan business risks.
Risks without proper governance of AI
But as board members dive into applying creative AI to their workflows, it can pose some risks to companies if AI governance isn’t in place. This includes clear guidelines for complying with security, policies and procedures without revealing sensitive company information. Over the past couple of years, employers have had to quickly establish policies around safe AI use, especially after the explosion of consumer interest in AI following the debut of the ChatGPT chatbot.
The thinking was that employees would use creative AI whether management blessed it or not, so HR and IT teams had to implement restrictions, skills classes and other types of training, as well as internal AI playgrounds, to enable safe. the exploration Experts say the same logic should be applied to board members as well.
“What we’re seeing is there’s definitely a need for a more fundamental understanding of the board’s fundamentals,” says Nithya Das, director of governance, risk and compliance SaaS company Diligent and chief legal officer. “You have to assume they’re going to find their own tools, which can raise different security and privacy concerns as an organization, given the sensitivity of the board’s work and board materials.”
Das says the training classes can be helpful in getting the boards up to speed on AI, similar to the education that was required in recent years when cybersecurity threats became the focus. One such course recommended by Rotar is from Stanford University “Awakening AI: Implications for Economy and Society.”
AI is a growing priority for corporate executives
A soon-to-be-released survey from the company’s research arm Diligent predicts that creative AI will rank sixth on the list of priorities for US public company board directors in 2025, behind growth and optimizing finances, but ahead of cybersecurity and workforce. planning
Sixth may not seem like a very high number, but Das says it’s an indication of what’s on AI’s mind. Leaders are still assessing their management team’s AI proficiency, dealing with concerns about data privacy and hallucinations, when AI models generate incorrect information based on inappropriate data.
“We think most boards and companies are at the beginning of their AI journeys, but they’re definitely very curious about AI,” says Das. “We hope to be an ongoing focus by 2025.”
Fiona Tan, Chief Technology Officer Wayfaire-commerce furniture and home goods retailer, says that even at digital native companies, management should explain to their boards the difference between AI-powered technologies and the traditional use of AI and machine learning that was already widespread.
“For a board, it’s really about realizing some of the nuances between what was predictive… what are the creative capabilities, what are the strong capabilities of the language models, and what are the risks,” says Tan. From that point on, they can think about where to deploy the creative AI. For a company like Wayfair, it can be about creating content and making content more personalized to each shopper’s needs.
The management team, Tan says, should be tasked with exploring various opportunities to improve the business with creative AI and communicating that vision to the board. This should also include a strong focus on emerging AI startups and building solutions that might be better off buying rather than building from scratch.
Looking for ways to disrupt your business
“For the board, it’s pushing to make sure we’re taking a bit of an outside-in approach,” Tan says. “Where are we supposed to go in and confuse ourselves?”
Omar Khawaji, chief information and security officer at Databricks, a data and AI software company, says board members and management should not be avid users of AI without understanding how these systems work and how they can be applied to the business.
“In fact, one trap I often see boards and other leaders fall into is, ‘I’ve used AI, I know how it works, it’s been three months, why don’t you just magically solve x, y and z problems.’ ”, says Khawaji.
He compares this common miscalculation of AI readiness to watching a cooking video on TikTok. Watching an influencer prepare a dish might take a few minutes, but doing the same task at home could take hours.
“Managing and governing, governing and curating and the challenge of organizing your data is where 90% of the work happens,” says Khawaji. The rest is related to training a model and leveraging it with the right use cases.
