Why AI governance is needed now
As the landscape of AI continues to shift, organizations are increasingly leveraging AI technologies to drive innovation, enhance operational efficiency, and deliver value to stakeholders. However, AI’s transformative potential also brings significant challenges.
- 52% of organizations say they are moving “fast” in their adoption of Generative AI.1
- 76% of leaders expect it to drive substantial transformation in their organizations within the next three years.1
- 75% anticipate that they will make changes to their talent strategies within two years because of Generative AI.2
- 78% of organizations plan to increase their overall AI spending in the next fiscal year.1
1 Deloitte State of Generative AI in the Enterprise Survey, July/Sept. 2024.
2 Deloitte State of Generative AI in the Enterprise Survey, Jan./Feb. 2024.
- Inaccuracy and hallucinations.
- Intellectual property infringement and confidentiality violations.
- Unethical use or bias.
- Increased brand equity and trust, leading to new customers and improved employee retention.
- Reduced costs from potential legal, regulatory, and other remediation activities.
- More accurate information for improved decision-making.
- A positive impact on society with ethical and responsible AI use.
Assessing the state of AI in the organization
Overseeing a company’s AI adoption and its related opportunities and risks requires a board of directors to first understand the company’s current AI maturity. This includes the following actions.
Develop AI fluency: AI can be challenging for board members—even those with technical expertise. Directors need to have a sufficient understanding of the technology and its implications to ask the right questions in the boardroom.
Understand the relevance of AI for the company: To understand opportunities and risks, management and the board should understand how AI is impacting—or will impact—the company, whether directly or indirectly.
Understand how the company is currently using AI: Board members need to have a clear grasp of how the company is currently leveraging—or potentially missing opportunities to leverage—AI. Boards should also understand the policies and procedures in place to help inform AI strategy and ensure compliance.
Understand how the company may use AI in the future: Boards need to understand how AI may affect the company in the future, especially given the rapid and unpredictable pace of technological change.
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Introducing the Deloitte AI Governance Roadmap
Key questions for the board to consider
Does management have a current “inventory” of how machine learning AI and Generative AI are being used in the company?<br><br>Does management have a strategy for how they plan to utilize AI in strategic objectives and functional areas or in other ways?<br><br>Does the board have the experience and expertise to advise on the strategy and then monitor progress of the implementation?<br><br>Does the board have a clear vision on how the AI initiatives are overseen across the governance structure?<br><br>Does the board understand the risks and opportunities associated with the AI strategy?
Key questions for the board to consider
Does management have a current “inventory” of how machine learning AI and Generative AI are being used in the company?
Does management have a strategy for how they plan to utilize AI in strategic objectives and functional areas or in other ways?
Does the board have the experience and expertise to advise on the strategy and then monitor progress of the implementation?
Does the board have a clear vision on how the AI initiatives are overseen across the governance structure?
Does the board understand the risks and opportunities associated with the AI strategy?
