Earlier this week Director held its 20th annual Boardroom Summit in New York City. Over two days, it was packed with ideas and insights from a host of fascinating speakers. We'll have lots more to share from the event over the next few days, but for now we want to focus on the sessions that garnered a lot of attention and generated a lot of questions.
The topic, of course, is generative artificial intelligence. Keith Meyer, global practice leader for board services at Major, Lindsey & Africa, interviewed Florin Rotar, chief AI officer at Avanade, about AI's rapid impact on corporate governance. They covered a number of key issues, from regulatory complexities to internal dynamics, and offered useful insights for corporate boards trying to navigate the dawn of the AI era.
“As an industry and as leaders, we're overestimating the short-term impact, but we're vastly underestimating the medium-term impact,” said Rotter, who oversees AI and AI training at the 65,000-employee consulting firm. His view is that “the biggest risk is not taking risks here.” Some useful takeaways from the session:
Regulation“If you do business in Europe, you are regulated,” Rothal said. The EU's aggressive approach to AI governance means companies, regardless of industry, must prepare for increased scrutiny. Rothal urged executives to question their management about their “responsible AI” strategy. “If they give you a look that says, 'What are you talking about?' you're at risk.”
control tower: To address AI governance, Rotter suggests a centralized system for overseeing the integration and impact of AI across the organization. “The risks that we think we're taking as a board are actually manifesting themselves on the ground,” Rotter explains. “In my experience, that's the biggest risk right now.” This AI “control tower” would work at multiple levels — project teams, executive leadership, and the board — to enable the board to set risk parameters, oversee use cases, and maintain transparency in the application of AI.
AI Driver's License: Avanade opened an “AI school” to train employees and introduced the concept of an AI “driver's license.” “All 65,000 people had to be trained on responsible AI and basic instructions,” Rotter says. The initiative ensures that every employee, regardless of their role, understands the basics of AI and how to use it responsibly. Employees receive different levels of training, like a driver's license, depending on their responsibilities. “There is management, and we test people. [make] Any mistake could result in your driver's license being revoked.”
AI in the Boardroom: Rotter explained how Avanade's board of directors is leveraging AI to streamline workflows and enable directors to interact directly with data rather than being swamped by reports. AI tools can assist boards with preparing materials, synthesizing data and even simulating complex scenarios to facilitate more productive and informed meetings. Additionally, the concept of an AI board “co-pilot” is becoming feasible, helping directors make sense of vast amounts of information and accomplish their governance tasks.
Activist Simulator: Beyond operational efficiencies, AI also offers the possibility for boards to simulate crisis scenarios – for example, using AI to simulate the actions of an activist investor can help boards and management proactively prepare for potential challenges.
Accelerating the use of AI: After several years of working with AI adoption, Rotter says he's found that the key to successful AI adoption is motivating employees with a focus on empowerment and not just productivity, of course. “The No. 1 priority is empowering employees to be their best selves,” he says. By positioning AI as a tool for personal and professional growth, organizations can reduce fear and build trust.
“I've been in the technology industry for 35 years,” Rotter said.[This is] It's one of those technologies that always surprises me how much ongoing change is necessary, because it takes so much work to get people to truly see AI as an enabler, not a threat. It still takes so much work to unlearn and relearn new habits. But that's not how it should be. AI should adapt to humans, not the other way around. But that's the reality. So ongoing change at scale is absolutely essential to success.”
