Does the board understand the potential impact of AI on the organization’s business model, culture, strategy and sector?
What boards need to know
Boards should understand how AI technologies are being applied within the organization and externally. They should ensure the organization has appropriate structures in place to manage ethical issues and understand how it is addressing algorithmic bias.
They also need to be aware of emerging frameworks, policies and legislation to ensure that their business has the right balance between algorithmic transparency and accountability. Finally, boards should feel confident in the robustness of their “black box” – the term used to describe a machine learning system. This can be achieved through a thorough review that determines whether the outputs from the system are as expected and whether proper controls exist to monitor these systems as they evolve over time.
The key questions for boards to consider are:
- Does the board understand the potential impact of AI on the organization’s business model, culture, strategy and sector?
- How is the board challenging management to respond strategically to both the opportunities presented by AI and the risks associated with it?
- How is the organization using AI technology and new data sets for governance and risk management? How are the dashboards of the board and the audit committee changing?
- Does the organization have a talent strategy for recruiting and retaining people with the necessary skillsets to manage and staff AI-related projects?
- Has the board asked management to assess how the adoption of AI impacts the integrity of its finance function or its financial statements?
The views of third parties set out in this article are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.
Artificial intelligence (AI) presents opportunities when applied well and risks when applied badly. EY’s Jeanne Boillet looks at both sides of the coin and highlights aspects of AI that company boards need to pay close attention to.