How Boards and Management Can Ramp Up Artificial Intelligence
The Agenda article, “How Boards and Management Can Ramp Up Artificial Intelligence," quoted Russell Reynolds Associates Consultant David Finke about how Boards and management are ramping up AI capabilities. The article is excerpted below.
As more details continue to emerge about artificial intelligence and how machines that work and react like humans can generate profit and market advantage for companies, all board directors are facing a familiar challenge: understanding the risks and rewards of another new technology.
Tech and governance experts say that boards can take slow but deliberate steps toward AI literacy such as creating an outside advisory group to help brainstorm on technical and governance issues connected to AI and its implementation.
But a technology executive search consultant says that he’s seeing mostly board strategy committees or digital or technology committees providing governance over artificial intelligence initiatives. David Finke, a managing director at Russell Reynolds Associates, says companies are also creating advisory boards to bend corporate directors’ ears on tech or digital issues. That allows for an AI expert to advise the board, but not have full fiduciary responsibility.
Finke says AI can help boards fulfill their duty to both oversee risk management and advise and consent on strategy. “It behooves the management team to think about the strategy — how can AI help us be competitive, help us automate and get to a better cost profile?” he says. “And there’s the risk management side: Is someone else applying this AI technology to be either disruptive or deliver that at a lower cost to the customer?”
Finke says companies have three choices for putting AI to work in their companies: They can either buy, build or partner. For example, Finke says that many clients in the auto industry are trying to understand whether they should embrace digital transportation by developing an AI capability in-house to create vehicle technology for autonomous driving or advanced vehicle safety, or whether it’s better to invest in or partner with an AI start-up.
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