In an era where artificial intelligence is reshaping industries at a breathtaking pace, board members are facing unprecedented challenges and opportunities that require immediate action. That's the takeaway from a recent conversation at the Board of Directors Summit, said Florin Rother, who oversees AI and AI training as chief AI officer at 65,000-employee consulting firm Avanade. He emphasized the urgency of implementing AI. This means you are more comfortable taking risks and accepting the possibility of short-term failure.
As AI moves from a cost-cutting tool to a revenue and innovation driver, understanding its medium- to long-term impact is not essential. It's mandatory. Lothar and co-panelist Keith Meyer, Global Practice Leader for Board Services at Major Lindsay Africa, discussed the complexities of AI, from driving cultural change to preparing for inevitable regulatory scrutiny. We shared seven steps boards can take to get through this.
1. Understand the following requirements: “As an industry and as a leader, we are probably overestimating the short-term impact, but significantly underestimating the medium-term impact,” Lothar said. His view: The biggest risk is not taking risks with AI.
2. Change your focus. “For the first three years, our use of generative AI was focused on operational efficiency, cost reduction, and automation, but what our CEO and board are asking us to focus on now is , an increase in revenue,” says Lothar. The environment has returned to the era of the technology boom of the 1990s. “There were a lot of dot-com companies that went bankrupt, but industry giants like Netflix and Amazon were born. The next generation of industry giants is literally being born today.”
3. Involve your employees. “People are expressing concerns about cybersecurity and deepfakes, but the biggest risk is not the technology, but the people and their willingness and readiness to adopt and use AI,” Lothar said. “There is a huge fear and distrust factor around technology, so trust needs to be built in order to successfully deploy it at scale and deliver the value that people expect. You know you've managed a cultural shift when people in your organization stop grinning and reassuring themselves. Use technology to help them become the best versions of themselves. We need to make sure they understand that.”
4. Prepare for regulation: “If you do business in Europe, you're going to be regulated,” Lothar said, calling on the board to ask management about its strategy for responsible AI. “If the response is, ‘What are you talking about?’ then that’s a risk.”
5. Create an AI control tower. To address AI governance, Rotar proposes a centralized system to monitor AI integration and impact across the organization. “The risks that we think we're taking as a board are actually being realized on the ground,” Lauter explained. “In my experience, that’s the biggest risk today.” This AI “command tower” works collaboratively and interconnected at multiple levels: project teams, executive teams, and the board of directors to help the board manage risk. Allows you to set parameters, monitor use cases, and maintain transparency in your AI applications.
6. AI driving license required: Avanade introduced an “AI school” to train its employees and introduced the concept of an AI driving license. “All 65,000 employees had to undergo training in responsible AI and basic prompts,” Lothar said. This initiative will ensure that all employees, regardless of their role, understand the basics and responsible use of AI. Employees receive different levels of licenses depending on their responsibilities. “If you're going to drive it like an 18-wheeler, you're going to have to go through a lot more testing,” he says. “We are also testing people. [make] If you get it wrong, your driving license may be revoked. ”
7. Bring AI into the boardroom. Avanade's Board of Directors is using AI to streamline workflows and allow directors to work directly with data instead of being overwhelmed with reports. AI tools assist boards by preparing materials, synthesizing data, and even simulating complex scenarios to facilitate more productive and informed meetings. For example, AI can simulate the behavior of activist investors, allowing boards and management teams to proactively prepare for potential challenges.
