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Artificial Intelligence is on everyone's mind and to date I, for one, have done a good job of chasing it away. But you, dear readers, have asked for some information and perspective. I have much work to do here, so will start with a summary of an article and a link that has crossed my desk recently.
There is no getting around that AI is a governance issue. Boards need to care about it and make decisions about it so that managers can find ways to navigate it. I'm taking baby steps here, knowing that while many readers are well past me on this, just as many are not. I'm starting with some content by Michael Peregrine of Forbes (Oct 09/24). In "Corporate Governance Jumps Into the Artificial Intelligence Discussion" Peregrine discusses the pros and cons, notably in an unregulated environment like we have here in Canada. He references the report "Technology Leadership in the Boardroom" prepared by the National Association of Corporate Directors (NACD). This report was prepared by a commission "consisting of leaders from technology, finance, management, military, consulting, higher education, insurance/risk, and law."
The changes and trends outlined in the Report include:
(i) rising stakes due to a confluence of technology trends and developments;
(ii) speed of change, which is compressing corporate strategy timelines;
(iii) shifting corporate competitive advantages;
(iv) technology that threatens to overwhelm board member experience;
(v) increasing focus on the trustworthiness of technology; and
(vi) the potential that technology innovation may be stifled by the current “patchwork” pattern of government technology regulation.
The report offers ten recommendations under three “core technology governance imperatives.” The entire list would be good to use for an introductory conversation with any board -- corporate or not-for-profit -- so please take what you can from them.
Imperative One: Strengthening Oversight
₋ Ensure trustworthy technology use by aligning it with the organization’s purpose and values;
₋ Upgrade board structures for technology governance;
₋ Clearly define the board’s role in data oversight; and
₋ Define decision-making authorities for technology at board and management levels.
Imperative Two: Deepening Insight
₋ Establish and maintain necessary technology proficiency among the board;
₋ Evaluate director and board technology proficiency; and
₋ Ensure appropriate and clear metrics for technology oversight.
Imperative Three: Strategy
₋ Recognize technology as a core element of long-term strategy;
₋ Enable exploratory board and management technology discussions; and
₋ Design board calendars and agendas to ensure appropriate focus on forward-looking discussions.
Th NACD report is the first of its kind, but it is not considered "best practices." It's just a way to start the conversation to help your board think about a topic that they didn't used to think about. Here is the article.
I also think you'll be interested in these survey results from Deloitte Global about corporate governance and AI. They point out that while we may be excited about AI and generative AI, it comes with risks and responsibilities for our people and organizations. The report stresses that we need to lead from a "mindset of trust and ethics" in order to shape where this goes. They note that "this is a pivotal moment in the history of human invention" and that as we move forward with AI we must also be thinking about the legacy we are creating. Here are the results.
Good luck on the AI journey. Please keep me apprised of what you learn, read, etc. Thanks!
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