In order to effectively utilise the possibilities of artificial intelligence, Boards of Directors need a conscious AI focus. Only with the board’s support can HR professionals secure investments and resources to shape AI strategies that serve both employee interests and company objectives. A widely cited study shows how the Board of Directors can exert a positive influence on AI application within a company.
In an era where advanced artificial intelligence (AI) models are reshaping the business landscape, Boards of Directors must reconsider their role in guiding and overseeing the integration of new technologies. Historically, academic studies have shown that technological issues typically receive limited attention in boardrooms; however, the advent of AI is driving a fundamental shift. AI holds the potential to revolutionise business operations, boost productivity, and unlock new opportunities. To harness these advancements, boards must develop a deep understanding of AI’s implications and establish clear strategies to manage risks and leverage AI’s benefits effectively.
Collaboration Between the Board and HR
To fully realise AI’s potential, Boards of Directors must implement robust governance mechanisms. This involves establishing clear accountability for the development, deployment, and oversight of AI systems. HR leaders are pivotal in crafting policies that ensure the ethical use of AI, particularly in HR practices, to safeguard employee rights and privacy.
A crucial aspect of AI governance is identifying and mitigating risks. AI systems can produce unintended outcomes due to biases in data or algorithms. Boards must ensure that controls and review mechanisms are in place to minimise these risks. This necessitates close collaboration between the board, executive management, internal controls, and HR to ensure AI systems are transparent, fair, and accountable.
Beyond risk management, boards should also seize the opportunities AI presents for HR practices. For instance, AI can automate routine HR tasks, allowing resources to be redirected toward more strategic initiatives. HR professionals can leverage AI to personalise employee development and foster lifelong learning, thereby cultivating a more agile and skilled workforce.
HR’s Role in Supporting the Board
The composition of the Board of Directors is crucial for the successful integration and utilisation of AI within companies. Together with the Nomination Committee, HR professionals play a central role in ensuring the board possesses the necessary AI expertise. They can take proactive steps to elevate awareness of AI’s importance at the board level and support the selection and development of candidates with the relevant skills.
A first step is to assess the current composition of the board and identify any gaps in digital and AI expertise. HR can serve as an advisor, emphasising the importance of a deep understanding of AI technologies and their implications for the company’s business model and competitiveness. Based on this assessment, HR can support the Nomination Committee in recommending the recruitment of new board members with relevant expertise or appropriate executive education initiatives for existing members. Specialised training programmes and workshops, offered by leading educational institutions or AI experts, are vital for continuous skills development. A comprehensive training plan that includes regular updates on AI trends and best practices can further enhance the board’s competencies.
Moreover, HR can propose the formation of an advisory committee comprising external AI experts. This committee would provide the Board of Directors with insights on specific AI-related issues, thereby sharpening the board’s strategic focus. Such initiatives not only strengthen the board’s expertise in AI but also foster a culture of openness and continuous learning at the highest level.
Through these strategic initiatives, HR can significantly contribute to ensuring that the Board of Directors is equipped with the AI expertise necessary to fully leverage AI’s opportunities while effectively managing its associated risks.
An overview of the entire portfolio of the St. Gallen Board Programmes can be found here.
Source: Shin, T., You. J. (2021) Strategic Directions for AI: The Role of CIOs and Boards of Directors. MIS Quarterly, 45(3), 1603-1643.
Note: A German version of this article was published in HR Today (issue 2/2024).
About the author(s)
Prof. Dr. Georg Guttmann Director of Board Programmes
Relevant executive education
Newsletter
Get the latest articles directly to your inbox.
Share article
More articles
Generative AI: Revolutionising the World of Work and the Key to Competitiveness
The Future of Artificial Intelligence: Opportunities, Challenges and the Importance of Human Skills
Leadership in the Age of Artificial Intelligence: Trends and Implications
How Artificial Intelligence is Affecting Boards of Directors and HR Practices
Executive School celebrates second Townhall meeting