Culture shock: How should boards navigate the GenAI goldrush?
Two years after the public release of ChatGPT, the potential and pitfalls of generative AI are still the subject of fierce debate. Artificial intelligence (AI) has been waiting in the wings for half a century —and has been applied to many use cases behind the scenes — however, it is the advent of generative AI, with its ability to engage in unsupervised learning and create new content, that has catapulted it to centre stage.
Now, the focus has evolved from the novelty of generating poetry and parking-fine appeals to urgent exploration of its deeper commercial and societal applications. At the same time, regulation has pursued AI with atypical alacrity, with the EU AI Act set to enter into force in 2025 and other jurisdictions swiftly following.
This dynamic landscape poses problems for corporate boards who are in the tricky position of needing to offer challenge and counsel on the strategic approach to implementing technology that is novel, broad in application, fast-changing and powerful.
Diligent recently convened a panel experienced in AI development, ethics and implementation, as well as board governance, to explore the issues boards face as they aim to oversee the strategy, governance and guardrails of AI.
5 key takeaways from our expert panel
1. Board AI maturity varies — but they all need to up their game
Caroline Cartellieri, Non-Executive Director and digital transformation specialist, noted that businesses are already using AI extensively. For boards, the decision is not whether to adopt AI, any more than they were involved in deciding whether the business would use spreadsheets thirty years ago. But, she warned that some boards are not talking about AI at all, and that is a risk.
Maria Axente, Head of AI, Public Policy and Ethics at PWC and a responsible AI pioneer, believes that boards need to up their game, saying: “At board level there needs to be a balance point recognising [AI’s] potential and downsides […] Disruption is coming one way or another and the board needs to support the executive team to navigate that.”
Providing the right level of challenges and questioning will be essential, but accessing AI expertise is going to be a core challenge at both board and executive level. Businesses are behind the curve, says Caroline: “I’ve been doing a lot of board recruiting and AI knowledge is not even part of the selection criteria – not even as a nice-to-have […] It’s one area that really needs to change. Every board needs to start thinking about AI, not just for board members, but for generally for recruiting CEOs and CFOs, because if your C-Suite is not comfortable talking about AI you may as well not bother.”
Maria agrees: “You need someone on the board who can understand IT people, otherwise you’ll be talking two different languages.”
2. A “wait-and-see” approach is a risk with AI
Boards are often naturally cautious, and few are confident to endorse a first-mover strategy where technology is concerned and risk backing the wrong horse. However, the incredible pace of AI evolution means that a “wait-and-see” approach has higher than usual risk. Even conventional technology projects have fallen foul of being obsolete by the time they have passed through traditional approval routes; AI moves orders of magnitude faster.
Diligent’s Strategic Market Solutions Lead, Dale Waterman, summed up the situation: “There are two extremes of people, those who are excited about AI and those who are worried, but the biggest risk is the people who decide to wait and see. Of course, we need to manage the risk and governance side of AI, but it is big, it’s going to change everything. You have to start acting now and choosing the path for the journey. Inertia is not a good thing”
Caroline agreed that speed is important if you plan to integrate new technology into your business with a degree of confidence that it will still be cutting edge by the time it’s implemented, adding: “It starts with people – you need people in your organisation that are savvy enough to know the changes going on in different technologies, otherwise you are reliant on vendors.”
Maria acknowledged the difficulty of accessing expertise and basing strategy on predictions in such a fast-moving market, but advised that directors “listen (with a pinch of salt) to some of the technology leaders” to get a sense of the macro tech trends shaping the market.
3. AI deployment must be meaningful
Despite the speed required for AI implementation, it is essential that it is also meaningful for the business. Maria highlighted the difficulties organisations face in translating standalone GenAI proof of concept experiments into “something meaningful for the business that doesn’t break things and has the safeguards around it to be able to scale with confidence.” Traditional project management approaches are not really fit for purpose in this scenario and businesses will need to reinvent project management for the AI era.
4. A significant cultural shift is required
The evolutionary nature of technology, and especially AI, demands a shift in how businesses and boards think about it. Dale advises viewing AI as a continuing journey, rather than a project with a completion date. However, historically boards have struggled with committing to large-scale organisational change.
Maria recalls that ultimately it took the COVID-19 emergency, rather than drive from senior leaders, to fully realise digital transformation and remote working. She warns that a similarly cautious approach to AI will risk a business ending up one of the “many losers” in the AI era.
5. Continuous learning must be part of the board and business mindset
The panellists agreed that relatively few directors and executives are taking a personal interest in GenAI and learning how to use it themselves. This limits their practical understanding of its potential.
Dale emphasised that no one has all the answers on AI right now, but what’s important is the willingness to learn about it, saying: “We need to build a culture of self-learning – everyone in the room from kids to CEOs and boardrooms, we all need to invest ourselves and AI – everyone needs to be upskilled in this.”
John Davies, Governance Director at Beyond Governance, agreed and raised the point that directors cannot limit their AI exposure to quarterly board meetings: “We can’t have directors relying on board meetings as their sole source of information on AI; they need to be informed and curious themselves.”
“AI strategy” as a corporate signal
Caroline Cartellieri is slightly sceptical that businesses need a specific ‘AI strategy’, reasoning, “You wouldn’t have had an ‘Excel strategy’ thirty years ago”. Instead, she advises companies to build their company strategy and goals in the context of using AI to achieve them.
However, a strategy with a clear AI component is an important signal for the business, believes Maria Axente, alerting stakeholders to the fact that change is coming.
Ultimately, we are in a period of volatility as the potential and pitfalls of AI come under board scrutiny, and they seek to find the balance between risk and reward. Directors need to invest personal time in improving their AI awareness and push back against institutional caution and inertia while also ensuring that AI deployment is relevant and meaningful.
As one seminar attendee aptly summarised the challenge, “You want to see that things have been tried and tested and are going to work, letting someone else do the hard yards for you. But the risk is you’ll find yourself too far behind. However, if it’s a question of committing resources in terms of people, money, and change management, you need to put forward a better concept than ‘everyone is doing AI so we must do it too!’”
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