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Briefing the board on AI: Educate to tee up investment

CIOs must take the lead on managing board expectations about artificial intelligence, including risks and opportunities. Done right, it can pave the way to project approvals down the line.

This year’s escalating hype around artificial intelligence finds CIOs once again in the spotlight. With leaders from every department bandying about possibilities and concerns, CIOs are uniquely positioned to provide real talk and leadership on the company’s AI agenda.

One place where those conversations must occur but perhaps have not to date is the boardroom. According to a 2022 Institute of Directors survey, 80% of boards did not have processes in place to audit their company’s use of AI. “They said they did not know what questions to ask,” the survey concluded.

In AI hype cycles, 2022 seems an eon away. Still, a 2023 McKinsey report corroborated this need for boards to be briefed on AI, finding that while 33% of businesses were already using AI and 40% were planning to aggressively invest in it, only 25% had AI on their board agendas.

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Clearly, there is a need for boards to know about AI, and it’s likely most board members are starting to ask questions. The CIO is the person most likely to brief them on the topic, so if you lead IT, what’s the best way to communicate with the board about AI and keep board expectations realistic?

Unless you’re the CIO of a highly tech-savvy company, chances are your board will need education as well as information when it comes to AI. Still, board members are highly accomplished in their own right and don’t likely need (or want) to be walked through an AI 101 slideshow.

Instead, board members’ interest will largely center on context — in particular, around the company itself. What are the competitive and operational headwinds the company is facing that AI can address? Where can its existing AI efforts improve?

Beginning with a broad overview of what IT is doing about AI, including opportunities and challenges unique to the company, is the best way to introduce the topic — and it provides an opportunity to segue more granularly into how AI can help, what it is, and how it works.

Effective education on AI

Another guideline for briefing the board on AI is to aim to educate board members to the point where they can comfortably talk about AI with highly skilled business associates in their day-to-day business roles.

It’s important for board members to feel they have sufficient command of the topic so that, in those conversations, they can ask questions and follow threads relevant to the business. Moreover, having a foundational understanding of AI and what it does also assists them in developing confidence in the technology that can make board approvals for AI projects easier down the line.

If you’re the CIO and you’re introducing the topic of AI in a boardroom presentation, your primary goal should be that each board member leaves the room with a basic understanding of AI, what AI does, and how it can help the company — and at a level where they can conduct further productive discussions on the topic with colleagues and company leaders.

Highlight benefits and risks

Because company boards are tasked with overseeing corporate compliance and social responsibility as well as reviewing revenues, expenses, and operational and financial health, CIOs must continue to educate board members about both AI benefits and AI risks. Doing so also helps set board expectations for AI initiatives because the board will understand upfront that implementing AI is not just a technical undertaking; it involves compliance, policy-making, and risk management as well.

For example, what if a company’s AI is biased, or if the data the company is using is flawed, and the company makes a faulty strategic decision based on its output? How do you prevent that? What about potential privacy issues that can arise with customers? How do you mitigate that, and what privacy guardrails can you put in place so that it never happens? What about your AI workforce? Is it sufficiently skilled and diverse enough to assure that the AI algorithms it develops are inclusive? And what about your employees? Will the introduction of AI cause worker layoffs or create risks of losing some of your most valuable employees?

In an ideal situation, the CIO should cover the potential AI risks that must be managed as well as the benefits before any AI projects start. In this way, the board has a sound understanding of the risk management and policy development as well as the technical work that goes into every AI project.

Be mindful of pre-existing expectations

Some years ago, I was working with the CIO of a very large East Coast bank. He told me that when he was first starting his CIO career, PCs were beginning to be called “servers,” and everyone had a PC at home for personal use. There was even a mantra at the time that the “mainframe was dead.”

Understandably, this CIO was a bit nervous when he had to face his board to ask for a major mainframe hardware and software upgrade. One of his board members asked, “Why don’t you just wire together a bunch of PCs and do the banking with that?”

At length, the CIO had to explain technically and operationally why a group of PCs wired together could not run an international banking system. This wasn’t easy, because at least one board member had already formed an opinion from something he’d heard.

A similar situation exists with AI, as it  is being heavily covered in the news. Companies are already using it, and even non-technical people, including board members, are using tools such as ChatGPT to generate content, manage household to-do lists, and help their children with homework.

As CIOs develop their AI messaging, they should keep these continuous outside exposures in mind, because these exposures can influence board expectations even as you are working to help set them.

Keep mission in mind

Getting to the board early on AI, giving board members a foundational understanding of AI and how it can help the business, and also letting the board know about risk factors are all useful ways for CIOs to set board expectations for AI and the company’s strategy in making the most of the technology.

The key is keeping communications open and, when needed, individually meeting with board members who might have specific questions about AI that weren’t fully addressed in the boardroom setting.

What matters in the end is that the board, the C-suite, the company’s employees, and its CIO all share a common vision of where and how AI will fit into the company’s mission.

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