The time is now
Over 40% of respondents to the Deloitte Global survey do not believe their organization is ready for broader AI deployment, with only 3% stating their organizations are very ready. In fact, scaling of GenAI in particular is proving to be challenging, with many efforts still at the pilot or proof-of-concept stage.
This still nascent state of AI presents an opportunity for boards to contemplate, define, and scale AI oversight in ways that allow the board to maximize the time it spends on the organization’s most strategic topics. To do this boards should engage, communicate transparently across multi-disciplinary teams, and continue getting up to speed on the topic. Right now, however, nearly half of those surveyed are either not satisfied with or are concerned about the amount of time devoted to board discussions on AI.
Part of the reason for lack of engagement may be the limited understanding most boards have of the “art of the possible” in the use of AI, with just 2% of respondents saying they consider their boards to be highly knowledgeable and experienced with AI. To remedy that, nearly 60% of those surveyed say they are independently seeking to enhance their own knowledge, while others say they are providing foundational education to the board, or are bringing in external experts to learn about the opportunities and challenges presented by AI. Some are even turning to immersive experiences, using digital avatars and demos to help board members become more fluent in the technology.
Addressing board governance of AI is even more critical when considering the popular uptake of readily-available GenAI tools—especially among employees. Although many companies still limit their workforce’s access to approved GenAI tools, their data could be at risk if employees use unsanctioned tools.
Taking action
With two-thirds of organizations increasing investments in GenAI, according to Deloitte US research, boards will likely need to start addressing AI risks sooner rather than later. To develop effective governance models, boards should consider the following steps:
- Put AI on the board agenda—and make it strategic. Boards that aren’t yet discussing AI should consider adding it as an agenda item. They should decide how often AI should appear on board agendas, or if a special session may be necessary. Boards should also consider bringing in management to hear their analysis on risks and opportunities to inform strategy and scenario planning. Other focus areas include figuring out how and when they will assess management’s AI ambitions and measure outcomes, their risk appetite towards AI, and how they intend to review regulation across geographies and jurisdictions.
- Define the governance structure. To effectively exercise oversight, boards will likely need to delineate and assign AI-related responsibilities. This includes deciding which matters need attention from the full board, and ensuring members are receiving the most robust and beneficial information from management. Boards may also need to consider connecting to business leaders beyond the CEO or chief technology officer while striking the right balance concerning the level of board involvement.
- Evaluate and enhance AI literacy. To effectively oversee the opportunities and threats posed by AI, boards should consider if they and their management teams are AI literate. They should explore training and educational opportunities to help the board upskill on emerging technologies and remain actively engaged in the evolving landscape of AI. Boards may also want to consider whether they need to recruit board members with more experience in AI and emerging technologies or revamp their succession plans accordingly.
In a complex environment in which opportunities, challenges, and priorities frequently emerge, it’s critical for organizations to govern at scale—whether related to AI oversight or another emerging topic. This means challenging orthodoxies while implementing balanced processes that allow the board to operate efficiently, transparently and in the best interests of the organization as a whole—supporting growth, creating long-term value, and sustaining the organization.