AI should be used in boardrooms to improve efficiency

The Corporate Governance Institute reports that despite the rapid adoption of artificial intelligence to help with the day-today running of businesses, senior leaders are hesitant to use this technology to improve their own efficiency and performace.

Deloitte’s study reported that 45% boards don’t include AI on their agendas. The 2024 Deloitte Global Boardroom Programwhich surveyed 500 board members and executives found that only 14% said their board discussed AI at every meeting, 25% said AI was on the agenda twice a years, and 16% said AI was discussed annually. Deloitte found that nearly half of respondents (45%) said AI hasn’t made it on their board agenda.

According Ciaran Bollard CEO of the Corporate Governance Institute boards that ignore AI could struggle to meet the ever evolving demands of watertight corporate governance.

According to Bollard, there are two unavoidable truths about AI: first, it will redefine the way we work and second, it is here to stay.

This should serve as a warning and an opportunity for directors. If managed correctly, directors have a wealth of potential at their fingertips that can help them navigate the new, stricter and higher-stakes environment.

Bollard said that “modern governance” is a must. “But it’s a fact that many boards haven’t thought about it enough yet.”

Board agendas are often crammed with issues such as inflation, tariffs and geopolitics.

He said that business leaders are missing the opportunity AI presents. He said that many directors view AI as a side issue, something they will get to when they are able. “They don’t realize that AI could be the missing piece to address all of the other challenges,” he said.

Bollard, for example, points out that AI-based tools, rather than relying on traditional key performance metrics and anecdotal data, can synthesise operational data in real-time, providing boards with a more complete picture of key personnel performances. AI models can be used to analyze multiple business performance metrics simultaneously. Bollard said that the rapid processing of data combined with different comparisons can help board members uncover trends they may not have noticed. They can also spot opportunities or risks sooner, and encourage key decisions at a time when they will be more impactful.

He said that directors face a number of challenges, including the sheer amount of data they must consume before making decisions. “AI can help boards understand and process different complex issues, and the data that supports them. It can also give directors the opportunity to clarify any elements they are unclear on, and to get a more complete picture before board meetings.

According to the Deloitte study, many respondents were aware that their board’s current level engagement may not be sufficient to oversee the risks and opportunities that could manifest from using AI. Nearly half of respondents (46%) are either dissatisfied or concerned with the amount time devoted to AI discussions. Bollard (19659019) recommended that businesses ensure AI Governance covers more than just establishing rules and adhering to them. It should also integrate AI into boardroom activities. “Companies who automate what can be automated, while continuing to accept responsibility, may find a long-awaited solution to boardroom compliance headaches, and endless streams data,” he said.