AI in Business: The One Thing Every Board Member Asks

AI in Business and the Board of Directors - Question Mark Graphic

Why Do We Need to Discuss Artificial Intelligence?

Board members have a number of critical issues to focus on such as; risk and reputation management, advising and encouraging the CEO, financial performance, and growth opportunities. Thus, their involvement is not expected in daily technical operations.

When I encourage board members to put AI on their radar, I’m usually faced with the question; “Why do we need to focus on Artificial Intelligence? There are different reasons behind the board members’ reluctance to embrace the ever-growing importance of AI. I have heard comments varying from:

  • We have more important issues to focus on.
  • Why should we focus on it?
  • We’re not a technology company.
  • AI is not an issue that the board needs to deal with.
  • We have too many tech issues to deal with already.
  • How is AI more important than other technology issues?

My reaction is usually a smile because even though they’re right in a conventional business context, the present and future of AI is anything but conventional

Artificial Intelligence is now a board-level issue because of its massive capability of disruption. It will forever change the way businesses and consumers interact. I’m certain that its impact will be more profound and far-reaching than that of any other technology.

One reason is because AI can get better every day with little or no human interaction. If you give it an objective and provide sufficient data, a well-developed AI operates on a continuous feedback loop that’s capable of improving exponentially in a short span of time. Once this flywheel effect is achieved, it is impossible for competitors to catch up. This is called the “Winner Takes All” paradigm.

AI and the Healthcare Industry

There are many examples of this from the healthcare industry. For example, in radiology, Artificial Intelligence is already able to diagnose serious health conditions that humans are unable to identify such as cancer. These AI-based diagnostic systems are continuously learning from the live database of millions of scans and getting better every day. Soon, AI will make human-only radiology diagnosis obsolete.

Similarly, AI has also reduced the time and cost of new drug and vaccination development as we experienced with COVID-19. What once required a decade or more of trials and billions of dollars can now be done in under a year at a fraction of the cost. AI has made this possible. Pharma companies not investing in AI will likely not exist in ten years.

Bear in mind that it’s not just healthcare that has been disrupted by AI. Its impact will extend from transportation to finance to consumer packaged goods and every other industry. This makes it both the biggest liability from a competitive viewpoint and the most significant growth opportunity available to companies today.

The AI Revolution is Already Underway

Artificial intelligence is already a board-level issue, even for non-tech companies. Now, does the board need to worry about it urgently right now?

The answer is obvious. AI is here and impacting your company now.

AI is already incorporated into the products and advertisements you see online. It is embedded in the entertainment content you consume. AI is working hard to determine which stocks, bonds, and commodities are bought and sold. AI is protecting you from cyber threats. AI is already changing who you are and how you and your consumers think in a way that’s hard to imagine.

If you are a board member who still believes that AI isn’t a board-level issue, you may be a liability to the company.

Here’s How Boards Can Address Artificial Intelligence

The following are three things boards can do to effectively tackle this important challenge:

Drive AI Strategy and Action from the Top

As it is the board’s responsibility to monitor other risks and opportunities the company faces, they should view themselves as the drivers of AI strategy. There should be a clear strategy to move forward as well as designated AI champions within the board. It is your responsibility to educate yourself on the AI advancements in your industry and clarify to the CEO that AI is a critical, board-level issue.

Start Governing AI Now

The path to success in AI is filled with obstacles ranging from built-in bias to unimagined consequences. Since it is new and complex, anticipate and be ready for unintended economic, political, social, and environmental consequences. Boards need to take responsibility for AI governance as part of their responsibility for reputation management. You need to chalk out your definition of responsible AI and create standards to ensure the ethical, transparent, and fair use of AI.

Don’t Be Afraid to Ask

Most board members’ knowledge is limited to the spelling of AI. Since the AI revolution is new, it may take you some time to catch up. Begin learning today. At one time the internet, social media, and smartphone technology were thought to be unapproachable. Don’t be afraid to ask for help. Well-informed board members make better advisors. 

Not only is Artificial Intelligence within the realm of the board’s responsibilities, I would go to the extent of saying that it is one of the board’s most important and urgent priorities. AI is an area impacting strategy, vision, opportunity, and risk management. It is not limited to being a tech-only thing anymore. My advice to board members is to get involved in Artificial Intelligence as quickly as possible.

This is a summary of the original Forbes article. To read it, click here.