This post is a recommendation to corporate directors and C-level executives to take a look at the magazine Directorship, which is available to members of the National Association of Corporate Directors.  [Alert: I am a member of the New England Chapter of NACD and work on our educational programming.]  For those without access, see below for an  outline of issues which should be on your agenda.

The recently released issue designated “Quarter Three 2023” has a cover story on “Artificial Intelligence–What Boards Need to Know” that ought to be  required reading for corporate directors. Passing the thought that anyone who sits on a Board has a fiduciary duty to be knowledgeable as to major technological changes and that NACD is a great way of fulfilling that duty, AND passing the fact that public companies are responsible to public investors (as enforced by the SEC) to fully disclose the uses and risks and impact of AI within a reporting company, simple logic tells all directors that they need to watch carefully several areas at a minimum:

The use of AI by your company and how it is controlled, to avoid errors in management, planning, marketing, procurement and labor matters;

The impact on labor force so that your workers are attuned to the use and misuse of AI, not to mention the impact on headcount and HR planning and implicit hiring bias through use of certain AI-supported tools;

The legal liability and attendant cost of errors occurring by reason of misuse of AI, or reliance without verification of actions based on AI research (as the most powerful AI tools, GAI, are prone to invent answers on their own (called “hallucinations”);

Evaluation of AI through a cybersecurity lens.

Boards need either a member attuned to AI use and risks or an extrinsic source to guide it.  Underneath the hype and the scare scenarios, this is an informational and operational tool that will in fact drive progress and profit in successful companies, and the proper use of this tool within a company is going to be part of basic blocking and tackling for boards of the future.

I recommend either a board committee to deal with GAI issues or a clear statement to an extant board committee charging responsibility and asking for periodic reports to the board as to issues perceived; this could go to a Risk Committee or a Technology Committee for example.  I would not recommend sending this to Audit, as that committee is typically over-burdened already and as the qualifications for serving on F&A are not necessarily congruent with being GAI-qualified.