It’s Time for Boards to Put AI on the Agenda – Here’s Why and Where to Start

Across industries and geographies, AI is not a topic of discussion that comes up often at board meetings. Only 14% of respondents say their board discusses AI at every meeting, 25% say it’s on the agenda twice a year, and 16% say AI is discussed annually. Nearly half (45%) of respondents say AI hasn’t yet made it onto their board’s agenda at all. Deloitte.

The transformative potential of Artificial Intelligence (AI) is evident across industries and geographies. Yet, despite its growing impact, AI remains largely absent from the boardroom. A recent Deloitte survey highlights a concerning gap in AI governance: only 14% of respondents report that their board discusses AI at every meeting, 25% say it’s on the agenda twice a year, and 16% indicate that AI is discussed annually. Shockingly, nearly half (45%) of respondents say AI hasn’t yet made it onto their board’s agenda at all.

This raises a critical question: Why are boards neglecting such a game-changing technology, and what risks does this pose to businesses in the AI-driven future?

The actual deployment of AI is the responsibility of management, and likely there are multiple leaders in the organization who understand the technology in more depth than the board. But the proliferation of generative AI has raised a myriad of challenging questions ranging from strategic to moral, ethical, and even existential – questions which must be addressed or monitored by the board. Egon Zehnder.

The AI Imperative for Boards

AI is not just a passing trend; it is reshaping industries, redefining competitive advantages, and driving innovation at an unprecedented pace. Companies that fail to embed AI into their strategy risk being left behind. The board, as the ultimate steward of an organisation’s long-term success, must ensure that AI is recognised as a key component of future planning.

??Governance and Risk Management

AI introduces unique challenges and risks, including ethical concerns, data privacy, bias, and regulatory compliance. Without proper oversight, these risks can lead to reputational damage or legal liabilities. Boards must ensure that AI is being developed and deployed responsibly, with strong governance frameworks in place.

??Strategic Alignment

The rapid evolution of AI means that boards need to be proactive in aligning AI initiatives with business strategy. AI can be a powerful enabler of growth, driving efficiencies and unlocking new revenue streams. However, without board-level involvement, organisations may struggle to integrate AI effectively into their broader strategic objectives.

??Talent and Skills

AI-driven transformations require a workforce with the right skills and capabilities. Boards must champion initiatives that ensure their organisations are equipped with AI expertise, fostering a culture of continuous learning and development. Ignoring this will only widen the skills gap and make it more difficult for businesses to adapt in the future.

The board’s oversight of AI will not be a one-and-done exercise. As a director, your efforts will evolve as your company’s comfort and use cases for technology do. Going forward, the board will need to keep the following considerations in mind as its journey progresses. Egon Zehnder.

Why AI is Not on the Agenda

The Deloitte survey results suggest a concerning disconnect between the executive suite and the boardroom when it comes to AI. Several factors could explain this:

• Lack of Awareness: Many board members may not fully understand the implications of AI or feel ill-equipped to engage in meaningful discussions about it.
• Perception of AI as a Technical Issue: AI is often seen as the domain of IT or R&D, rather than a strategic issue that requires board oversight.
• Competing Priorities: Boards are juggling numerous challenges, from economic volatility to ESG initiatives, which may push AI lower on the agenda.

With AI poised to revolutionise many aspects of our lives, fresh cooperative governance approaches are essential. Effective collaboration between regulatory portfolios, within nations as well as across borders, is crucial: both to safeguard people from harm and to foster innovation and growth. Kate Jones, U.K. Digital Regulation Cooperation Forum CEO

Where to Start: Setting Up an AI Governance Structure

Getting AI on the board’s agenda is the first step, but establishing a governance structure around AI ensures that it’s managed effectively and responsibly across the organisation. Setting up a governance structure may seem daunting, but at AI Capability, we make it simple by providing the following essential components to help organisations build a solid foundation for AI oversight:

AI Governance Framework

We assist in designing a tailored governance framework that aligns AI initiatives with your organisation’s strategic objectives. This includes defining the roles, responsibilities, and accountabilities for overseeing AI projects, ensuring that both the board and executive teams are clear on who manages what aspects of AI.

??Risk and Compliance Monitoring

AI comes with unique risks, such as bias, ethical concerns, and data security. We provide a robust risk management process that identifies potential AI-related risks and establishes clear guidelines for regulatory compliance. This ensures your AI initiatives are not only innovative but also safe and ethical.

??AI Ethics and Responsible AI Practices

Ethical AI is critical to building trust and protecting the organisation’s reputation. We help boards establish ethical guidelines and principles to govern AI development and deployment. These include best practices for fairness, transparency, and accountability in AI decision-making.

??Performance Metrics and Reporting

To keep AI initiatives on track, it’s important to measure their impact. We guide boards in setting up key performance indicators (KPIs) for AI, so you can track ROI, efficiency gains, and alignment with business goals. This regular reporting ensures AI remains a priority and is integrated into wider organisational performance reviews.

??Continuous Learning and AI Education

We offer ongoing training and education for boards and leadership teams, ensuring they stay informed on the latest AI trends, technologies, and risks. This allows board members to confidently engage in AI discussions and make informed strategic decisions regarding AI investments.

By partnering with AI Capability, organisations can build a comprehensive and agile AI governance structure that ensures responsible AI use, manages risk, and aligns AI efforts with long-term strategic objectives. The journey to AI readiness starts here, and we make it simple and scalable for organisations at any stage of their AI journey.

Now is the time to elevate AI as a standing agenda item in the boardroom. Boards that embrace AI governance will be best positioned to lead in tomorrow’s AI-driven business environment. We can help contact us today.

Sources:

Deloitte Report

Egon Zehnder Report