Members of the board in businesses are missing out on the potential to ensure artificial intelligence (AI) manages the regulatory landscape. According to the Corporate Governance Institute, despite the rapid roll-out of AI to assist with the day-to-day running of companies globally, senior leaders are reluctant to utilise this technology to enhance their own efficiency and performance.
A study from Deloitte recently reported that 45% of boards do not include AI on their agendas. The 2024 Deloitte global boardroom program, which surveyed nearly 500 board members and C-suite executives, reports that only 14% of the business leaders polled say their board discusses AI at every meeting; 25% say AI is on the agenda twice a year; and 16% say AI is discussed annually. Deloitte reported that nearly half (45%) of respondents say AI has not yet made it onto their board’s agenda at all.
According to Ciaran Bollard, CEO of the Corporate Governance Institute, boards that ignore AI may struggle to meet the ever-evolving demands of watertight governance.
“There are two undeniable truths about AI in business: the first is that it will redefine how we work, and the second is that it’s here to stay,” he said.
“This should serve as both an opportunity and a warning for directors. Managed correctly, there is a vast potential at their fingertips, able to assist them in this new, stricter, higher-stakes landscape of modern governance,” said Bollard. “But the fact remains that so many boards worldwide just haven’t given it enough thought yet.”
Given that board agendas are often packed with all manner of issues, such as inflation, tariffs, geopolitics, and environmental and social governance and regulatory compliance, he said business leaders are missing out on the opportunity AI offers. “Many directors see AI as an aside to all that – something they’ll get to when they have time,” he said. “They don’t realise that AI could well be the missing link to address all the other challenges.”
For instance, Bollard points out that rather than relying solely on traditional key performance indicators and anecdotal reports, AI-based tools can synthesise real-time operational data, which provides boards with a fuller picture of key personnel performance.
AI models can also be used to analyse various business performance metrics at once. Bollard said the rapid processing of data, combined with the different comparisons, can help board directors uncover trends they might not have noticed, spotting opportunities or risks earlier, and encouraging key decisions when they will have more impact.
“One of directors’ most urgent challenges is the sheer volume of data that they need to consume before making a decision,” he added. “AI can help boards process and understand different complex issues and the data behind them. It can also offer directors the chance to question elements they’re unclear on and obtain a fuller picture ahead of board meetings.”
The Deloitte survey also reported that many respondents are cognisant that their board’s current level of engagement may not be enough to oversee the opportunities and risks that could manifest by using AI. Nearly half (46%) said they are either not satisfied with or they are concerned about the amount of time devoted to discussions on AI.
Bollard recommended that businesses ensure AI governance covers more than establishing rules for use and sticking to them, but also integrating AI into boardroom activity. “Companies that do this right, automating what can be automated while continuing to accept overall responsibility, may find the long-awaited answer to boardroom compliance headaches and endless streams of data,” he said.
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