Boards understand the connection between Governance and AI: A thorough understanding of its risks and oversight of its use within a business is critical. But AI’s impact ripples through Environmental and Social concerns, too, potentially affecting everything from carbon footprint to diversity of people and ideas. A recent examination of boards and AI oversight explores the ESG connection. The White House weighed in this week on the complexities of regulating AI, and LinkedIn founder Reid Hoffman talks about his perspective on AI as a member of Microsoft’s board in this week’s Washington Post Live.
In other news, firing leadership after a scandal can backfire; check out the need-to-know items regarding corporate governance; Ten ways your board can boost corporate sustainability; and The Church of England becomes a shareholder activist.
In the Spotlight
Reid Hoffman on the Future of AI
The founder of LinkedIn, Microsoft board member, and outspoken proponent of AI gives his thoughts on the road ahead.
“And so the question is, how do we bring these into people's lives where you can go to--you know, I just released this product, Pi. I cofounded Inflection. And you can go to it and say, ‘Hey, my coffeemaker is broken. How do I fix it?’ and it can help you. Or you can say, ‘I had a really stressful conversation with Washington Post Live’... and it will say, ‘Oh, how can I help you with this?’ …that human amplification is so important in this, and that is part of what I think we are seeing. I think Satya and the Microsoft crew have just done a stunning job of seeing the future and starting the road towards it with vigor and diligence.” WASHINGTON POST LIVE (Transcript)
Biden Administration: AI is an Opportunity and a Risk
Vice President Harris talks about the challenges of regulation.
“The Biden administration is confronting the rapidly expanding use of artificial intelligence, warning of the dangers the technology poses to public safety, privacy and democracy while having limited authority to regulate it. Vice President Kamala Harris, who met Thursday with the chief executives of leading AI companies Google, Microsoft, OpenAI and Anthropic, said the technology ‘has the potential to dramatically increase threats to safety and security, infringe civil rights and privacy, and erode public trust and faith in democracy'…The Biden administration views AI as a major opportunity for the U.S., but one that comes with significant risks…But so far, the administration has sought to place much of the burden of ensuring public safety on the companies developing the technology. That partly reflects the paucity of tools the White House currently has to regulate artificial intelligence, some observers say.’” THE WALL STREET JOURNAL
Microsoft, Google Join New AI Governance Initiative
New organization will train top privacy professionals on oversight and ethics.
“The chief privacy officers from Microsoft Corp. and Alphabet Inc.'s Google are joining a new artificial intelligence training initiative to equip professionals in their field to oversee AI’s emerging issues…The latest initiative comes in response to the accelerating deployment of AI tools such as Microsoft’s Bing and Google’s Bard chatbots. Products that rely on computers to complete tasks or make decisions bring both potential promise and possible pitfalls for people’s privacy and civil rights, as well as for a company’s brand reputation and the spread of misinformation or scams.” BLOOMBERG LAW
What Boards Need to Know about AI Oversight
How AI overlaps with ESG, key considerations for boards, and more.
“As more businesses adopt artificial intelligence (AI), directors on many corporate boards are starting to consider their oversight obligations. Part of this interest is related to directors’ increasing focus on Environmental, Social and Governance (ESG) issues. There is a growing recognition that, for all its promise, AI can present serious risks to society, including invasion of privacy, carbon emissions and perpetuation of discrimination. But there is also a more traditional basis for the recent interest of corporate directors in AI: as algorithmic decision-making becomes part of many core business functions, it creates the kind of enterprise risks to which boards need to pay attention.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
From Boardspan this Week:
Advice on Board Refreshment
Rely on internal data and external benchmarks.
"It is useful to assess your board’s composition, understand how that composition relates to the organization’s strategies, and have robust board performance assessment and board succession processes in place. In assessing your board’s composition, consider the average and range of tenure; your board’s size and committee structure; and the board’s profile in terms of skills, expertise, experience, age, gender, and compensation. Examining these, relative to the board metrics used by major institutional investors and benchmarks for companies similar to yours in industry, size, and scope, can create context and identify likely shareholder concerns.” DELOITTE via BOARDSPAN
