EY Report Highlights How Boards Can Support Effective Use of AI

The EY Center for Board Matters released an article titled, “Four Ways Boards Can Support the Effective Use of AI” which highlights how boards can work with management to support the effective implementation and use of AI. While the article focuses on corporate board directors, there are key insights for fund directors as well. According to a recent EY survey of corporate CEOS, 95% stated they “plan to maintain or accelerate transformation initiatives, including artificial intelligence (AI) and other technologies, in 2024.”

As part of the article, the authors outline four key ways that boards can provide effective oversight and governance as companies begin to embrace this technology. First is to establish a strong foundation for data use. This includes addressing data quality issues, building out responsible models, and privacy. Second, EY notes that directors should support the integration of AI into the organization. The authors note “[b]ecause of the board’s longer-term perspective and often longer-tenured experience, it can help management pause to create a broader strategic framework.” Third, it is important to weave responsible AI into the fabric of the company. To effectuate this, boards may “seek to establish regular and systematic updates from management on AI opportunities and risks, confirm that AI is on the agenda for board meetings and act on any noted red flags.” Last, enhancing the effectiveness of board oversight can help integrate and analyze the use of AI technology. EY states that boards can establish technology committees, focus on education, and have strong communication skills between board members themselves and management.

Click here to read the EY article “Four Ways Boards Can Support the Effective Use of AI.”