Skip to content

15 May, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • leadership on AI

      How to get ahead on AI leadership

      The question isn’t how AI will change business—it’s whether leaders can harness it to drive...

    • canada tariffs

      Corporate governance to the fore in Canada

      As Canada responds to the tariff conditions set by the US, companies need to take...

    • AI will transform

      4 ways AI will transform board dynamics

      Opportunities and challenges are arising from the integration of artificial intelligence into corporate governance.

  • Comment
      • View all
    • leadership on AI

      How to get ahead on AI leadership

      The question isn’t how AI will change business—it’s whether leaders can harness it to drive...

    • canada tariffs Corporate governance to the fore in Canada

      As Canada responds to the tariff conditions set by the US, companies need to take...

    • meritocracy Fairness makes for meritocracy

      Favouring actions over persuasion, boards can take small yet extremely effective steps to improve diversity,...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • ai boards Corporate world has a ‘huge appetite’ for artificial intelligence

      AI could change boardrooms to the extent that directors’ duties would change too, a panel...

    • EU non-financial reporting reforms are an ‘opportunity’

      Firms can take advantage of the delayed implementation of CSRD and CSDDD to take stock...

  • Career
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board & Governance Services
    • Director Reference Guide: Fostering the board-CEO relationship

      This Board Agenda Director Reference Guide on fostering the board-CEO relationship provides practical advice to...

    • Forvis Mazars AI 2025

      Performance Pulse: Are UK businesses prepared for AI?

      Forvis Mazars measured the AI preparedness of more than 300 UK businesses: 97% say they're...

    • Parker review cover

      Improving the Ethnic Diversity of UK Business, Parker Review update 2025

      The 2025 Parker Review update report, supported by EY. Over the past year, significant progress...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

Rise of the machines requires a ‘stakeholder approach’ from boards

by Gavin Hinks on April 20, 2021

Researchers suggest treating artificial intelligence and machine learning as a corporate responsibility issue could help mitigate its risks.

Machine learning circuit board

Image: BeeBright/Shutterstock

Companies are in need of a new approach to coping with the risks presented by machine learning (ML) and artificial intelligence, according to academics, which should include sharing the governance role with stakeholders.

According to legal experts, despite eagerness among businesses to adopt machine learning (an application of artificial intelligence which sees machines harvesting data to work out optimal decisions on their own) “corporations seem to be slower to recognise the need to manage the risk of deploying ML systems”.

Iris Chiu, of UCL in London, and Ernest Lim, of the National University of Singapore, propose in a new paper that companies need to take a “corporate responsibility” approach to ML because of the unique risks that it presents. They call this a “thick and broad” approach.

“Such a framework should integrate corporations private interests and the public aspect of their power and citizenship. So that the use of ML is integrally located within business-society relations,” they write.

But in identifying the governance steps needed to keep ML under control, they write that stakeholders should play a central role.

“There should be proactive engagement on the part of companies rather than waiting for complaints to arise,” they write.

“Companies should be willing to treat their stakeholders, both internal and external, as potential gatekeepers to co-governing the development and use of innovation such as ML.”

ML risk and governance

It’s not hard to see why the pair would choose corporate responsibility and a stakeholder approach to ML governance. The use of machine learning to process data has the potential to produce decisions riven by bias. There have been concerns that ML decisions have been racist and sexist; some facial recognition software has found it easier to deal with white skin and male faces.

San Francisco was the first US city to ban the technology in 2019 while recent reports suggest the European Union is working on new legislation to restrict the use of high-risk AI technology.

Chiu and Lim identify a number of risks including legal liability risks, the possibility of infringing regulation, or reputational risk when dealing with “stakeholders or communities in possibly disorientated or frayed relations”.

They suggest ML governance become an issue for senior management and the boardroom. They point out ML should be considered a “matter of culture”.

ML governance should also be “enterprise-wide” rather than leaving technology decisions in “siloed departments”. They also suggest the issue needs proactive management and more disclosure, at least on a voluntary basis, about the way ML is used inside companies.

But the inclusion of stakeholders in governance decisions remains the most attention-grabbing recommendation.

Ethics, governance and board skills

Chiu and Lim follow a host of others to warn about the ethics and governance of artificial intelligence. Other recent research produced recommendations that AI requires two levels of governance: one to oversee operational issues, and the other to look at ethics. Writers Maria Lillà Montagnani of Stanford University and Maria Lucia Passador at Harvard—conclude: “AI can indeed play a key role in corporate boards, but it also creates significant risks which can only be properly addressed if the corporate structure is designed to cope with a more extensive use of AI.”

Meanwhile, boardroom skills may be an issue. A survey by Board Agenda found that while companies are enthusiastic about using AI, boardroom know-how may be lacking. More than half the survey respondents (53%) claim their boards are not sufficiently skilled or knowledgeable about AI and its implications for business and industry.

Despite its presence almost everywhere AI remains relatively new technology. And while the tech may be seductive, the values and ethics around its use is still developing. Addressing the governance issues would be a step forward.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • AI decision-making presents new ethical risks
    May 18, 2022
    AI thinker

    Businesses are allowing artificial intelligence to make decisions that need a human touch. Boards must balance the risks and benefits.

  • Technology, cyber risk and ESG top list of business leaders' concerns
    June 8, 2022
    Digital code on skycrapers

    Mazars survey reveals 82% of executives plan to increase investment in IT systems, while 75% plan to boost spending on sustainability.

  • Experts urge vigilance on cybersecurity amid Russian invasion of Ukraine
    February 28, 2022
    Russian flag in code

    UK and US cybersecurity agencies are among the specialists recommending that companies "bolster their defences" against cyber attacks.

  • Home front: how digitalisation is moving cybersecurity boundaries
    October 20, 2021
    Man working remotely

    The pressure for digital transformation in the wake of Covid-19 is creating new cybersecurity challenges and responsibilities.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

AI, artificial intelligence, Ernest Lim, Iris Chiu, machine learning, research, risk, strategy, Technology

Search


Follow Us

Boardroom Intelligence

Stay in the know and register for free to receive our essential Boardroom Intelligence Briefing featuring:

  • Top governance headlines, expert opinion & boardroom insights, exclusive whitepapers & strategy guides, delivered to your inbox every week – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

By registering you will be able to access one premium article each month, selected partner newsletters and content, plus updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board & Governance Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap