Governance of AI: A critical imperative for today's boards
By Deloitte
Lara Abrash | Karen Edelman | Arno Probst
The November, 2024 edition of the Hub is highlighting a survey report from Deloitte which explore the readiness of Boards on governance of AI. It examines how boardrooms are managing AI adoption and governance and found almost half of boards do not yet include AI in their agendas, though there is rising awareness of AI's risks and opportunities. Key insights from the report include:
- Current Board Engagement with AI: Many boards rarely discuss AI—45% of respondents indicated it hasn’t been an agenda item. For those who do discuss it, risk and regulatory committees are often responsible, though some boards have assigned it to the full board.
- Increasing AI Awareness and Knowledge: The report emphasizes the need for boards to better understand AI, as 79% of respondents reported limited knowledge of AI capabilities. Many boards are exploring ways to build AI literacy, such as through educational sessions, adding AI experts, or consulting external specialists.
- Focus Areas for AI Adoption: Near-term AI initiatives mainly target productivity and efficiency, with organizations focusing on customer experience and innovation. The report highlights that broader AI implementation remains at an early stage, often within pilot programs.
- Building Effective AI Governance: To manage AI responsibly, boards are encouraged to establish governance frameworks. Suggested measures include setting strategic agendas for AI, defining oversight structures, assigning clear responsibilities, and implementing risk management practices.
- Steps for Boards to Enhance AI Oversight: The report outlines actions boards can take to improve AI oversight, such as scheduling AI as a regular agenda item, ensuring adequate management reporting on AI risks, enhancing board education, and adjusting board composition to include AI expertise.
The report underscores the pivotal role boards play in guiding ethical and strategic AI use and encourages immediate steps to strengthen AI governance as organizations move toward more significant AI integration.
(Note: IICA duly acknowledge the ownership/authorship of the report and republishing the same only for educational purpose of ID Databank members)
