Diligent & Fortune Director Roundtable Series: A Gen AI Playbook for the Board
In today’s evolving technological landscape, generative AI stands out as both a transformative opportunity and a complex risk for businesses. Leaders have taken note that gen AI is not just hype, and now are grappling with how to implement it. Where does this leave the company’s board of directors? Are members to focus on risk, opportunity, a mixture of both? And how can they navigate implementation if they are not fully educated about the technology itself? As AI adoption accelerates, boards must cut through the noise, ask the right questions, and embrace their role in steering organizations toward responsible and effective use of the technology. Fortune and Diligent hosted a virtual event with an esteemed panel to explore the role of the board in gen AI and gather actionable insights for boards as they navigate gen AI’s challenges and possibilities. The panel was moderated by Jeremy Kahn, AI Editor, Fortune, and Co-chair, Fortune Brainstorm AI; and featured executives Nithya Das, Chief Legal Officer and Chief Administrative Officer, Diligent; Omar Khawaja, CISO, Databricks; Florin Rotar, Chief AI Officer, Avanade; and Fiona Tan, Chief Technology Officer, Wayfair.
Das set the stage by sharing research from Diligent, showing that gen AI is sixth on the list of priorities for boards of directors, behind traditional concerns like growth and financials. She noted that gen AI is now ahead of topics like workforce planning and cybersecurity in terms of focus for boards. The AI focus at the board level is not all about innovation and growth. She relayed that boards are carefully considering risks that the technology brings. In particular, “the biggest risk that directors are seeing is the lack of internal capabilities and knowledge among their leadership teams,” she revealed.
Given the risks, it is important for boards to provide direction for companies. However, guidance has not always been very clear. Khawaja said that he has seen leaders take guidance from boards too literally, which has ended in poor implementation. Instead of simply directing companies to create an AI strategy, he encourages boards to think about a company strategy that is informed by the opportunities of gen AI. “I think it’s important for boards to ask [how we will] leverage AI to de-risk, to accelerate, to expand, to scale our strategy,” he said. Rotar agreed, adding that he thinks it is key for companies to figure out how to derive the greatest value from AI. Currently, he sees that companies are focused on productivity gains, rather than leveraging the technology to drive greater business strategy.
For boards to consider how AI can drive business strategy, though, it is critical to understand the technology. Tan advised that boards begin their AI journey by understanding how gen AI is different from the current AI used in their organization, such as predictive machine learning. Das offered that Diligent has an AI Ethics & Board Oversight course available to board members, and Rotar added Stanford’s “The AI Awakening” course may be useful as well.
Tan noted that, once board members have a foundational understanding of the technology, boards can play a pivotal role. At Wayfair, she described that executives and leaders within the organization typically focus on use cases for gen AI, as they know the nuances of the business and where it will be best applied. The board, on the other hand, can help push AI implementation and bring different perspective, she said. “I think for the board, [the focus] is pushing to ensure we are taking the outside-in approach.” she affirmed.
The panelists on the call agreed that leveraging gen AI to revolutionize business strategy is one of the technology’s greatest opportunities. However, it does not come without challenges and risk. The greatest challenge, they said, is people. Rotar, who has been working with AI for many years, said he spends 85% of his time on people-related topics. “The No. 1 success factor for [gen AI implementation] is people.” He emphasized that organizational readiness and trust in the technology is perhaps the primary challenge. He encouraged companies to help employees see how the technology can help them thrive and become the best version of themselves, which in turn fosters trust, increases wide-scale adoption, and ultimately drives value.
In addition to helping businesses adopt AI, boards have a responsibility to help manage risks in AI. A theme that emerged is the necessity of having a responsible AI framework. Tan suggested, for those who don’t currently have a responsible AI plan, that they take what they already have for technologies like predictive machine learning and augment for the specific risks of gen AI. “I think having [a responsible AI] framework is super important, so you ensure that you don’t have a team that goes rogue and does something you don’t know about.” Khawaja added that it is critical to have a responsible AI framework that is actionable, specifically discussing AI risks and how the company will address and manage those risks.
In closing, Das remarked on the great utility of conversations like these. “We all know that [gen AI] is being used in our organizations” she quipped. Fortune panels, she said, give her an opportunity to discuss these crucial topics and leave with learnings. For example, she said, she will be walking away with new ideas on measuring ROI around gen AI, such as using it to assess such functions as work satisfaction, discussed by Tan.
Diligent & Fortune Director Roundtable Series: Navigating the Geopolitical Landscape
In this Diligent virtual roundtable, hear from subject-matter experts on the best ways for organizations to oversee and mitigate geopolitical risk.
Diligent & Fortune Director Roundtable Series: The Board & ESG
Hear from subject matter experts about the latest challenges in the ESG space, response to political backlash, and more.
Fortune Director Round Table Series: Overseeing Human Capital Risk and Company Culture
Learn how to manage human capital risk and foster a strong company culture. Explore strategies for overseeing employee well-being, aligning organizational values, and driving business success.
