Fiduciary duties could evolve to include competence and understanding of artificial intelligence risks and opportunities, according to experts in a special panel discussion exploring the development of AI in boardrooms.

Natalie Salunke, general counsel at Likezero and a veteran manager of corporate legal teams, told a special panel discussion, hosted by Board Agenda in partnership with Nasdaq, that AI could change boardrooms to such an extent directors’ duties would change too.

This could be the result of governance and legal frameworks as they adjust to accommodate AI.

She said boards would need to come to terms with “AI-augmented decision-making” and “ultimately, evolving fiduciary duty”.

The webinar, Unlocking the Potential of AI: A Roadmap for Boards and Governance Leaders, took place against the backdrop of a corporate world still coming to terms with the disruptive potential of AI in business models.

However, it’s also becoming increasingly clear that the proliferation of new AI-driven boardroom tools could transform the way boards make decisions.

Currently, boards can use AI for taking minutes as well as date analysis and comparison with competitors.

Informal adoption

Some boards already have AI-driven tools at their disposal, working in enclosed networks. In other cases, it is becoming clear that directors are using AI informally to process and examine company information.

The panel discussion ranged across of number of issues touching on the integration of AI into governance practices.

Though the technology is in place in many companies, it is currently being used in a mostly limited way (as in the example of board minutes). Panellists agreed, however, that there was a “huge appetite” to go further.

AI is generally utilised up front to produce documents such as board packs, rather than live in boardrooms as meetings take place. One panellist did, however, share how they had generated financial information on five competitor companies as discussions were taking place.

The European Union, US and the UK have all generated AI laws that feed into governance for the technology, but boards also have to ensure they are picking the right AI applications.

Panellists discussed the possibility that selection could involve an approval across multiple levels, including legal departments and, potentially, an AI committee of the board led by a senior figure.

Shadow play

James Harley, principal product manager and head of innovation at Nasdaq, argued there was a need for companies to move quickly to adopt AI governance frameworks because employees were already using what has become known as “shadow AI”—personal accounts to undertake work tasks. This potentially risks data leakage of sensitive information.

Part of the board’s AI responsibility is “looking at the opportunity it can bring and then ensure that people are using it in the right way,” said Harley.

Caroline Cartellieri, a digital transformation specialist and non-executive director at Saffron Building Society, underlined the pressures to take advantage of AI.

“Boards will make decisions—data-driven decisions, more quickly and more easily.

“That then raises the whole question… whether we’ll see some kind of bifurcation amongst companies, where the ones that adapt to AI and work with AI make decisions quickly and therefore rise to the top.

“Then you’ve got the others that fail to adapt and eventually go the way of the dinosaur.”

The panel remained optimistic about the transformative effect of AI. “There’s potential for quicker, shorter meetings, more strategically focused. It will give the opportunity to make data-driven decisions more quickly and it gives the opportunity to get to the crux of what’s really important and being able to move an organisation on faster.”

The webinar, Unlocking the Potential of AI: A Roadmap for Boards and Governance Leaders, is now available to watch on demand.

With real-world examples and practical guidance, it’s an interesting and useful watch for any board member or governance leader looking to take the next step in their AI journey. WATCH NOW at Boardagenda.com