Last week, I met with a group of leading chairs to discuss implications of the pervasiveness of Artificial Intelligence for corporate boards. The conversation was energetic and with many diverse views. From personal experiences with Gen-AI when preparing for meetings to global perspectives on how investors increasingly pressure boards to ensure critical capabilities and oversight. With a twinkle in the eye a chair said: “it's not like the invention of electricity”. A fair point that first made me smile, but then also reflect. Because what if it is? What if AI is “the new electricity”? What opportunities and risks would this pose to global organizations to their board governance and leadership?
In a new Deloitte Global Boardroom Program survey of nearly 500 board directors globally, 45% of respondents state that AI is not yet on the boardroom agenda. Another 44% of those surveyed say the pace of AI adoption needs to accelerate with 41% say their organizations are not ready for AI.
Is it time to step up AI oversight in the boardroom?
Here are a few immediate actions boards can consider taking to navigate opportunities, risks and bolster AI governance:
- Decide on cadence of discussions and educational sessions
Agree on a regular cadence for putting AI on the board agenda. Consider educational session(s) on AI and related topics for the board e.g., during board strategy retreat? - Assess the board skills matrix and lead
Will AI require a reevaluation of the skills matrix and board composition? Should boards delegate AI ownership to one or more board members and ensure the right balance between high-level oversight and on-the-ground innovation. An AI lead director? - Revisit strategy and scenario planning
Has the board had an initial discussion with management to hear their analysis on risks and opportunities related to AI and the AI ambition of the organization? What is the risk appetite and how will the board assess, support, and, if necessary, challenge management’s point of view? - Measure progress
When and how will the organization review measurement of the progress and benefits of using AI in a way that ensures robust oversight of investments? - Engage with stakeholders
Engaging with stakeholders—including employees, customers, and regulators—is essential. Understanding their concerns and expectations around AI can guide the board in making informed decisions that align with societal values?
Embracing the opportunity
Although enterprise investment in AI is increasing globally, many boards are still getting up to speed and are unsure how to govern its use. Quoting my colleague Lara Abrash: “AI is here, now. It’s vital for organizations to govern at scale, which means challenging boardroom orthodoxies while implementing balanced processes to ensure the board’s time is spent on the most significant and strategic topics.”
Predicting the future is hard. However, AI has the ingredients of a paradigm shift. Maybe not “the new electricity” bur certainly a major change in the way we think and do business. Facing this change with an open mind and the courage to challenge status quo will position boards to take advantage of the opportunities it brings and safeguard shareholder interests. The time to act is now—AI governance is not just an option; it’s an imperative for the future of business.
Forfatter spotlight
Michael Vad
Michael comes with more than 20 years of experience as a board Advisory Partner and has specialised in board evaluation and board advisory having worked with both Danish and global companies, also on individual competence mapping and board culture assessments. Spørg mig om: Bestyrelses- og topledelsesrådgivning Michael Vad har i to årtier arbejdet med international bestyrelses- og topledelsesrådgivning for børsnoterede, familie- og kapitalfondsejede selskaber. Hos Deloitte leder Michael vores nordiske Board & Executive advisory-forretning med fokus på bestyrelsesrådgivning, CEO succession og talent management.