In the early 1940s, mathematician and computer scientist Jon von Neumann wondered if a program could demonstrate basic computational intelligence. By investigating this complex question, one of the first forays into artificial intelligence (AI) was born: the stored-program computer.
Decades have passed, yet AI is still poised to transform how we learn new information, analyze data, develop intelligent solutions, and enhance industries like transportation and health care.
Yet in modern times, AI in the boardroom can complicate things before it makes anything easier.
Consider GPT-4 by OpenAI and its information model, ChatGPT. With these predictive tools, you can comb through vast amounts of data in far less time, but you must first navigate concerns around AI’s validity and ethical use.
In particular, your boardroom must consider:
- How to strategically use AI in boardroom conversations
- How to responsibly govern AI within the broader company
Before boards consider an artificially intelligent future, they need to understand the factors that spurred AI, the benefits and challenges of implementing AI in the boardroom, and how to navigate adoption. Once they do, they can consider beneficial use cases within the boardroom and strategize around AI’s impact before expanding to the broader organization.
Pre-AI Inflection Points for Board Governance
Historically, boards have been composed of individuals in later career stages. That means they likely aren’t digital natives, so new technology may create hurdles.
“Boardrooms have been relatively immune or resistant to technological change,” says Rob Kunzler, Chief Marketing Officer at OnBoard.
Three key events have transformed board leaders’ mindsets and opened them up to AI tech adoption:
- The inception of cybersecurity risk
- The invention of the iPad
- The COVID-19 pandemic
Diving into each helps new and experienced board leaders step into the AI era with confidence.
Cybersecurity Risk Demanded New Solutions
In the late 1980s and early 1990s, cybersecurity threats arrived on the scene, posing a great risk to boards.
Boards must retain records, meet regulations, and protect confidentiality when dealing with vast amounts of information, from meeting agendas to financial records.
Tech advancement brought an increase in malware attacks and phishing scams during this era, so naturally, many board members expressed concerns about it. They pictured large-scale information breaches, loss of trust, and litigation concerns.
The advent of AI in the boardroom is similar: proactive board members must research the risks to make educated decisions about its adoption.
The iPad Led to Trust
Hailed as “a revolutionary device for browsing the web, reading and sending email, enjoying photos, watching videos … reading e-books, and much more,” the iPad transformed board operations upon its release in 2010.
“The iPad was a huge moment in time,” Rob says. “All you had to do was show board members that this rectangular black frisbee could dynamically replace hundreds of pages and printouts.”
Boards began acknowledging the need for technology to help them better connect and make strategic decisions. Similarly, AI could become a critical “iPad moment” for boards.
The Pandemic Necessitated a Hybrid World
In early 2020, the world went virtual. Boards had to use technology to facilitate and coordinate meetings as organizations pivoted to a digital model.
This increased boards’ openness to new technologies, as video calls allowed for flexibility when in-person meetings weren’t possible.
Many boards moved beyond basic meeting hosting platforms to technology that offers full board management capabilities. Suddenly, they could retain records on a secure platform (no more file folders), coordinate meetings based on the optimal time for the group, and use analytics to build smart agendas.
For a total board management solution, OnBoard streamlines governance, provides real-time insights, and limits risk, all in a secure portal.
AI’s Potential Wins and Losses
AI models analyze larger swaths of information than the human mind ever could. With tools like ChatGPT, users gain content related to their intent in a fraction of the time it would take to research.
By thoughtfully using AI in the boardroom, boards can make positive impacts through predictive modeling:
- Better decision-making: The ability to pore over information from every angle on the internet lets board members strengthen their decisions.
- Improved governance: Board members used to spend hours reviewing hundreds of pages of documents in preparation for their next meeting. With AI to quickly review and summarize essential information, they can instead use this time on better governance and overall board processes, like ensuring stakeholder satisfaction.
- Centralized information: By integrating new AI technology, your board can experience the ease of having all their data in one place. In research by OnBoard, corporate governance professionals noted that using a board portal provided them with increased flexibility between board meetings because everything they need is in one spot.
- Efficiency: The days of physical board books are gone. Today, boards host virtual meetings, share information via new technologies, and even develop agendas and key documentation using AI.
- Data-driven focus: Through robust analytics capabilities, AI models can provide valuable insights for boards on what’s working well, what could be improved, and how to improve focus areas.
- Protection from risk: AI foresees risk through predictive modeling and machine learning, which iterates over time and grows with your organization.
But there are losses involved, too—specifically when an organization uses AI in the boardroom sloppily or unethically:
- Mistakes happen: AI models come with a disclaimer. The information presented may lack validity and always needs to be verified. It’s up to leaders to train the board on responsible AI use, which includes fact-checking to ensure accuracy.
- Ethics take a backseat: AI doesn’t have morals or values—it can’t acknowledge ethics when providing information. Instead, you must infuse ethics into your AI practice, or you may experience legal ramifications. Start by developing ethical principles and policies for the board, and review the organization’s AI use throughout the year for quality purposes.
- Data security falters: Entering confidential or proprietary data into an AI chatbot like GPT can put your company at risk. Contrary to popular belief, AI chatbots aren’t considered secure communications channels. This can harm the stakeholders you serve and directly violate confidentiality. Train board members to take the proper precautions.
- Lack of regulation: Boards implementing AI must understand the compliance and regulatory requirements within their market. Set clear use cases around AI that honor these regulations. Highly regulated industries like banking and health care need to stay especially mindful of public discoverability and record.
Navigating the Winds of AI Change: The 5-Point Framework
If you’re considering implementing AI in the boardroom, you need to consider the risks. But this doesn’t just mean assessing potential problems and running from them.
“One of the big obligations of any board is risk management,” Rob says. “It isn’t the avoidance of taking risks. In fact, it’s the opposite.”
Weigh the costs and benefits of using AI with an evergreen model called Rob’s 5-Point Framework:
- Ethics: Before bringing AI into their organizations, boards must consider its ethical implications and risks.
- Bias: Responsible AI use means understanding that information may contain bias and errors. Assess information before using it.
- Accountability: The organization and board must clearly explain how they leveraged AI in their decision-making process. Start by appointing a leader accountable for all decisions made by AI.
- Responsibility: Research by the Institute of Directors (IoD) notes that more than 86% of businesses surveyed use AI without the board’s knowledge. Board members should provide clear guidelines to ensure the organization integrates AI services or products responsibly.
- Cybersecurity: AI is technology. Organizations must take steps to detect and assess cyber threats just as they would with other technologies. They should also put guideposts for adoption in place, like determining if new technology has an ISO certification and an encrypted board portal.
Cycling through these 5 points allows your board to take a comprehensive view of any risk—and make changes and decisions accordingly.
What Does the Future Hold?
AI is still a ‘known unknown’ for boards. Tools promise to deliver unparalleled intelligence, but it’s too soon to predict how they’ll impact every facet of an organization.
If implementing AI in the boardroom on a large scale feels too daunting, Rob recommends taking small actions today that will familiarize you with AI’s capabilities and open the door to future use cases.
“There are so many aspects of board meetings that are understandably rote and administrative,” Rob says. “If not automated, they could be augmented in a smart, intelligent way through advanced technology like AI.”
Start with low-risk AI integrations:
- Ask ChatGPT to review a document and provide the 10 most important points
- Create board meeting agendas or formulate meeting summaries for members
- Review cybersecurity risks to stay ahead of threats affecting your business
- Summarize pre-meeting materials
- Analyze historical financial data to recommend potential courses of action
- Automate board meeting scheduling
Welcoming AI to the Table
Some boards might consider bringing on an AI board member to attend meetings and provide rich insights.
While this may seem a little dystopian, it’s intriguing to consider the possibilities of a position that could analyze vast amounts of data and aid the board in strategic thinking.
AI in the boardroom can never replace the human element of boards themselves. Only your board members can approach the table with a sense of values, ethics, and confident decision-making abilities.
With this in mind, boards shouldn’t fear or avoid the advent of AI. By embracing it as an ally and preparing for its evolution, boards can recognize that they should evaluate AI at the same level as other areas of investment.
Start by requesting a free trial of OnBoard, a powerful board management software that streamlines and simplifies board governance with AI integrations. With features like Advanced Search algorithm to search meeting records and conversations, and Engagement Analytics, providing real-time insights, you can confidently integrate AI into your board.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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