The Board’s Role in AI Governance

We often discuss the importance of good governance for managing AI use and adoption. Board oversight is a critical element of good governance. The board oversees company strategy at a high level, but remains removed from day-to-day management. This puts boards in a position to spot risks and opportunities and provide valuable insights. With many companies adopting AI at a rapid pace, board oversight of AI is critical. A recent guest post in The D&O Diary discusses the challenges boards face, and the value they provide:

“The integration of AI into corporate operations underscores the urgent need for boards to enhance their governance frameworks, ensuring robust oversight of AI strategies, risks, and ethical implications. As AI-related risks and expectations for oversight continue to evolve, boards should actively engage with C-suite management to ensure responsible adoption. Securities disclosure requirements further underscore the necessity for vigilant and informed board oversight. Looking forward, proactive board engagement with AI-specific policies and metrics will be pivotal in mitigating risks and capitalizing on AI’s transformative potential.”

One major obstacle boards face is a lack of AI expertise. The article cites a recent Deloitte survey revealing that 33% of companies are “not satisfied” or “concerned” with how often their board discusses AI. Additionally, 66% report “limited to no [AI] knowledge or expertise.” AI has rapidly become a business priority. Boards will need to be educated on AI fundamentals if they are going to carry out their necessary risk mitigation and opportunity spotting functions.