How board members are thinking about AI

Artificial intelligence is transforming the way companies work—even at the top. C-suite executives now rank AI literacy as the No. 1 skill needed to navigate business change, according to a recent LinkedIn report. In fact, 88% of leaders surveyed in this report said speeding up their businesses’ adoption of the technology is a priority this year.

Although business leaders across many sectors agree AI is important, some acknowledge it can be difficult to know how and when to implement it, especially since it is constantly changing.

“It’s still an early technology, in terms of its capabilities,” says Heather Redman, cofounder of the venture firm Flying Fish Partners and board member at several companies. “We’re all watching with both anticipation and trepidation as to how good it gets.”

With AI’s momentum showing no signs of slowing, here are the key things board members and the people who advise them are keeping in mind when it comes to integrating AI into businesses.

Focusing on where is AI actually useful—and where it’s just hype

Before adding AI to the business, whether internally or externally, those who advise board members on new technology say the most important thing is not to get caught up in the hype surrounding AI. Instead, they tell board members to think about how the technology could truly benefit the business—for example, finding new uses for AI that set a company apart from competitors.

“You don’t want to neglect your core business because you’re shifting everything towards AI,” says Christoph Wollersheim, AI consultant at the leadership advisory firm Egon Zehnder.

To cut through the noise, many board members are focusing their conversations about AI around four main questions: where does AI fit into the company’s strategy? What regulations govern the new technology? How can the company use it responsibly? And how will it change the workforce?

Communicate plans with the rest of the company

With so many questions to consider with AI, it’s easy for boards to get bogged down. However, Redman urges companies to take time to really nail down their AI strategy so they don’t hold employees back from innovating.

“People tend to fixate on the technology, and I think we need to also be thinking about the human side as well as the strategy in the business side,” Redman says. “We’re seeing a lot of surveys now where employees are incredibly nervous but also incredibly eager to use the technology, and the senior levels of the company are sometimes holding them back.”

To overcome this indecision and learn to communicate more effectively about AI, some leaders are looking at how peers in their business’s competitive landscape are using the technology and trying to imagine similar uses in their own work.

“In my past six months of conversation with board members, many of them have become AI savvy,” says Beena Ammaneth, executive director of the Deloitte Global AI Institute. “But they also want to learn more about what others in the industry are doing. They’re looking for those best practices.”

Some best practices, Ammaneth says, are thinking of how to use AI to set your company apart, empowering managers to innovate quickly, staying ahead of emerging risks and regulatory changes that will impact AI, and creating a structure of governance around AI initiatives.

Balance the risks and opportunities AI brings

Once boards decide that bringing AI into the company is worthwhile, there are still lots of risks and opportunities to consider. Especially since the technology is both new and always changing, many of its risks are still unknown.

“When it comes to any new technology or innovation, I think the immediate reaction among board members—and it’s for good reason—is . . . trying to understand what potential risks it introduces,” says Dylan Sandlin, program manager of digital and cybersecurity content at the National Association of Corporate Directors. “With new technologies, it always offers a potential to impact your strategy in a way you didn’t anticipate.”

So far, inside the boardroom, Redman estimates only 1% to 2% of boards are actively using AI. However, she says it can be a great way to get some “non-human bias” in the room, eliminating some biases in human decision making. For example, board members may be swayed by “recency bias,” or a bias toward trying solutions that worked in the recent past instead of exploring other options. An AI tool trained on a variety of solutions may pick one that was used less recently but may be better suited for the current situation. Still, Redman warns against AI being used in a way that could expose sensitive data or information that is not meant to be public.

Outside the boardroom, there are similar risks. AI programs—whether internal or client-facing—can hallucinate and generate misleading or harmful information. As the technology continues to change, leadership teams will need to be prepared to change with them.

“The board’s going to need to maintain an appropriate oversight that matches the scale of the impact of this technology,” Sandlin adds.

Start small with implementation

Since there are risks associated with AI programs—and it is time-consuming and costly to implement them—some boards are inclined to take it slow when it comes to introducing AI to the workplace.

“The biggest issue isn’t so much bringing AI into the boardroom,” Redman says. “It’s to get your whole board to feel comfortable [with AI].”

To help bridge the gap in comfort and get projects moving, some board advisors suggest bringing an AI expert onto the board or starting with an AI workshop to help leadership teams understand the technology and its uses.

Others suggest starting by implementing smaller AI projects—such an internal AI program with a relatively narrow scope, such as one automating marketing or finance processes—to build confidence and support across the business before moving onto larger and more impactful uses for AI.

“Not using AI is not an option,” Ammanath says. “You have to use AI no matter what business or what domain you are in—and that’s not just true from a business perspective, but also from a job perspective.”

Continuous education

Above all, board members looking to implement AI in their companies are working to educate themselves about the technology as much as possible. With constant education, they hope to be prepared for the next questions that the tool brings to their governance.

“AI shouldn’t be a topic that one expert knows everything about,” Wollersheim says. “It’s a core strategic topic that everyone should know something about.”