Stanislav Shekshnia

Valery Yakubovich

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>Few board members recognize AI’s potential to help them prepare for and engage in substantive, well-informed, and strategically focused discussions with management and their board colleagues.</p>
  <h5>The Reason</h5>
  <p>Directors worry that using AI could make their companies vulnerable to information leaks, that AI is prone to hidden biases, and that AI may anchor their decisions in the past. They may not know how to mitigate those risks.</p>
  <h5>The Solution</h5>
  <p>Give directors training that makes them comfortable with and skilled at using AI. Start by helping them use AI for personal productivity. Then experiment with AI in meetings: Train it on governance best practices and let it act as a performance coach, for instance.</p>
 </div>
</article-ideainbrief><p class="mag-icon-boards-w30">In 2014 Hong Kong–based Deep Knowledge Ventures formally appointed an algorithm to its board of directors, giving it voting power on the VC firm’s investment decisions. At the time, the appointment was seen as a gimmick. <a href="https://www.bbc.com/news/technology-27426942" target="_blank" rel="noopener">The algorithm</a> simply analyzed quantitative data according to parameters chosen by humans to produce a base recommendation that the board members could debate. It was useful because it was faster than a human data analyst, but few observers believed that virtual board members would become commonplace.</p>

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<p>Few board members recognize AI&#8217;s potential to help them prepare for and engage in substantive, well-informed, and strategically focused discussions with management and their board colleagues. That&#8217;s what the authors discovered when they conducted focus groups with more than 50 board chairs, vice chairs, and committee chairs from public and private companies in Europe, Asia, and North America. Most board members readily acknowledge AI&#8217;s value as a personal productivity tool and recognize its critical role in corporate operations. But they shy away from using it to improve board performance. That&#8217;s a mistake.</p>
<p>This article explains how AI can contribute to boards&#8217; work by assisting individual board members, supplying the whole board with better information, and joining the board and actively participating in discussions. It also examines some of the risks commonly associated with AI, such as information leaks and sample biases, and describes how to mitigate them. Finally, it offers an adaptive learning-by-doing process for making AI an integral part of deliberations in the boardroom. It is the responsibility of board chairs to create engagement, help orchestrate collective experimentation, and maintain momentum.</p>

How Pioneering Boards Are Using AI

Few board members recognize AI’s potential to help them prepare for and engage in substantive, well-informed, and strategically focused discussions with management and their board colleagues. That’s what the authors discovered when they conducted focus groups with more than 50 board chairs, vice chairs, and committee chairs from public and private companies in Europe, Asia, and North America. Most board members readily acknowledge AI’s value as a personal productivity tool and recognize its critical role in corporate operations. But they shy away from using it to improve board performance. That’s a mistake. This article explains how AI can contribute to boards’ work by assisting individual board members, supplying the whole board with better information, and joining the board and actively participating in discussions. It also examines some of the risks commonly associated with AI, such as information leaks and sample biases, and describes how to mitigate them. Finally, it offers an adaptive learning-by-doing process for making AI an integral part of deliberations in the boardroom. It is the responsibility of board chairs to create engagement, help orchestrate collective experimentation, and maintain momentum.

How Pioneering Boards Are Using AI

Summary.

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