Governance professionals must embrace AI to advise boards and stay relevant

The AI summit taking place in Bletchley Park will tackle questions on how to mitigate the risks posed by AI development and the balance needed to encourage innovation while regulating to avoid potential harms.

Organisations will need to take these decisions for themselves, meanwhile boards should be confident they are doing so based on the right information and governance framework. The governance professional, whether they are a company secretary in a listed company or operating in the not-for-profit or public sector, has a crucial role to support their board.

To provide this support, governance professionals must:

  • Develop a basic understanding of AI technology, including its capabilities, limitations and potential applications within their sector or organisation. This will help them to understand the potential impact of AI and to make informed decisions about its adoption and use.
  • Become familiar with the five principles and good practices of AI governance, as espoused in the National AI Strategy, 2022. This includes knowledge of how to develop and implement AI policies and procedures, how to manage AI risks, and how to ensure that AI is used in a responsible and ethical manner.
  • Be aware of the regulatory landscape for AI. This includes knowledge of relevant laws and regulations, as well as emerging trends in AI regulation.
  • Governance professionals also need to be familiar with the ethical implications of AI. This includes knowledge of issues such as fairness, transparency, accountability and privacy.

As evidenced in our report Defining governance: An exploration of practitioners’ role and value, ‘Today’s highly trained governance professionals are required to be adept at meeting the … challenges of interpreting often deeply technical regulations to ensure organisational understanding and adherence.’ David Mortimer, Head of External Affairs, CGIUKI said, ‘A key attribute of the advice from governance professionals is that they will take the long view of whether activity is right for the organisation, not simply whether it is possible to do, or within the law as it currently stands. Some refer to this as the ‘smell test’. The challenge of AI will be the pace of innovation, and governance professionals must be confident in using their judgement to advise the board.’

If not already underway, governance professionals in complex or fast moving sectors must help their board develop their AI strategy and how it ties to their overall strategy and goals. Even smaller or relatively straightforward businesses will benefit from considering how they might use AI in the future. To support this, they will want to consider how they educate the board on the pertinent issues and help them to weigh the risks and benefits of different options. Governance professionals should also support the development of internal policies and processes to assure internal and external stakeholders that their adoption of AI is responsible and ethical.

Governance professionals should embrace the potential for AI to transform their own role. AI can be used to automate many of the repetitive tasks that governance professionals currently perform, such as reviewing documents, conducting compliance audits, and preparing reports, freeing them up to focus on value-add work such as giving advice, managing stakeholders and contextualising information.

The ability of AI to analyse large amounts of data can be harnessed to provide insights on risks, such as anomalies which may indicate fraudulent activity or cyber security threats. Analysis can also identify trends in, for example, customer behaviour or market developments which may lead to developmental opportunities. Early appropriate adoption combined with the measured judgement of those experienced in governance can help to improve governance practices and feed into risk assessments and compliance policies.

The opportunity allows those practicing governance to focus on their skills as advisors with a strong understanding of how decisions are made and what is right for their organisation, reenforcing and enhancing how the skillset is valued. 

See our full press release for more for more information alongside our AI hub for further resources surrounding this burgeoning technology.

ESG Summit: 2 May 2024 Download this year's course catalogue Introduction to Corporate Governance Engage Governance podcast series Essentials of ESG: Pathway to Good Governance Join our upcoming training for governance professionals

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