AI in the Boardroom
We’ve all read or heard about common uses of AI. Stories abound of students using the tool to write essays, to explain concepts, to summarize articles and provide ideas for research. Bloggers are using AI to create and refine content. Everyday people are relying on AI tools for research and in some instances, a version of friendship. Staff are using AI tools to create presentations, press releases, plus automate tasks and communications.
But is there a value for AI in the boardroom?
According to a recent paper by Harvard Business Review, the Hong Kong based venture capital company Deep Knowledge Ventures, formally appointed an algorithm to its board of directors in 2014, giving it voting power on the firm’s investment decisions. Whilst many regarded the appointment as a gimmick at the time, the algorithm analyzed data according to set parameters to produce recommendations faster than any human data analyst could do, which the board members could then debate. According to the company, their “decision-making models are upgraded and perfected by AI”.
In 2024, International Holding Co (IHC) in the United Arab Emirates, added an AI-powered observer to its board, to help its human board members make better strategic decisions. This virtual human, named Aiden Insight, is being used to “continuously process and instantly analyze decades of business data, financial information, market trends, and global economic indicators,” according to IHC. The company claims that since implementing this AI observer, it has “not only achieved significant improvements in corporate governance, receivables management, etc., but also achieved its stock trading performance and promoted the continued growth of business and investment”.
However, Harvard Business Review’s paper suggests that most board members still underestimate the potential of AI. At best they’re using AI tools to enhance personal productivity, but not for board level decision making. We suspect that a lack of digital literacy for some generations of board members may be a challenge along with a hesitancy to embrace such significant technological change to the ways traditional board structures operate. But it does beg questions. Could AI be the critical tool that gives a competitive edge for strategic decision making? If it can produce strategic simulations of scenarios and test proposals and check governance compliance faster than any human can, is it not worth using, even if simply for board decision validations?
There are of course, elements of risk that need to be addressed, inclusive of potential for information leaks, avoiding sample bias, and accuracy and currency of data being analyzed. After all, the inclusion of the wrong data in analysis may simply result in AI recommendations that would repeat the mistakes of history.
All indicators at this time though, are that the boards and executive teams who can overcome those risks to make better decisions, faster, have potential to deliver competitive and tangible advantages for their organisations.
About the Author
Ian Mael is valued across his HR network for his diligent communications and authentic partnerships. As the leader for interim HR executive hires at Carter Morris, he brings over 15 years of recruitment experience for multi sector hires within demanding deadlines for the full range of specialist roles within the HR profession.