Risk Awareness Week slides on AI Governance for Boards

Why are we talking about AI?

• High impact

• High uncertainty

Key considerations for Boards

• Linking AI to strategy

• Keeping high level

• Understanding risks

• Governance processes

• Staying current

AI is a strategic topic

• The Board has oversight of strategy

• AI uses need to be considered as part of the strategy – it is one tool to deploy

• Impact, materiality and timing will differ by sector eg. advertising vs financial services vs manufacuring

• Incremental vs transformative uses

• Leader vs fast follower or even slow follower

• What resources do you have?

• What’s the risk tolerance?

Understanding risks

• Security – data privacy, cyber

• Accuracy – hallucinations, deep fakes, laziness, cheating

• Cost

• Technical – computer power, personnel

• Environmental – Gen AI footprint

• Organisation and staffing

• Supply chain, vendors

• Regulatory

• Legal

• Reputation

Key Risk Oversight Points

• Hear from new voices in the boardroom

• Ensure management involve multiple parties – risk, IT, product development, advertising and marketing, legal, HR, internal audit

• Ask questions about data, how it’s being used and protected

• Ask questions about processes, how AI is being used and how the risks are mitigated

• Understand who is responsible and hold them accountable

Uses of AI in Risk Management.

• Trend spotting

• Horizon scanning

• Prediction (use with caution)

• Training and teaching – helping learners, personalization

• Communication

Human Capital Considerations

• • Job security – replacement?

• Recruitment and retention

• Training

• Skill sets – prompt crafting is not programming

• Regulation and compliance

What to do as a Board Director