{"id":1394,"date":"2023-06-19T14:45:26","date_gmt":"2023-06-19T14:45:26","guid":{"rendered":"http:\/\/elite-minds.com\/blog\/?p=1394"},"modified":"2023-06-19T14:47:56","modified_gmt":"2023-06-19T14:47:56","slug":"navigating-the-future-unleashing-the-power-of-ai-with-responsible-governance","status":"publish","type":"post","link":"http:\/\/elite-minds.com\/blog\/navigating-the-future-unleashing-the-power-of-ai-with-responsible-governance\/","title":{"rendered":"Navigating the Future: Unleashing the Power of AI with Responsible Governance"},"content":{"rendered":"

Introduction<\/span><\/h2>\n

The\u00a0AI market size<\/a>\u00a0is expected to reach $407 billion by 2027 up from $86.9 billion revenue in 2022 with 64% of businesses expecting AI to increase productivity.\u00a0While this growth is impressive, the risks of AI for corporations and its leaders are also increasing.\u00a0The Center for AI Safety (CAIS) created a\u00a0Statement on AI Risk<\/a>, \u201cMitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.\u201c with signatories including CEOs of AI firms DeepMind and Anthropic, and executives from Microsoft and Google.\u00a0Even OpenAI CEO Sam Altman is a signatory of the CAIS statement and he is asking to\u00a0regulate AI<\/a>.\u00a0More than 1,000 tech leaders, researchers and others\u00a0signed an open letter<\/a>\u00a0urging a moratorium on the development of the most powerful artificial intelligence systems, including Elon Musk and Steve Wozniak (co-founder of Apple). \u00a0The governance of AI for Board Members and C-level executives is an emerging topic with key areas to consider being: \u00a0leaders\u2019 lack of comfort with AI, ESG, liability, ethics, regulatory awareness\/compliance, use\/adoption, and data security, to name a few.\u00a0A proactive governance framework for AI is needed to address the risks and achieve the expected benefits.<\/p>\n

Risks<\/span><\/h2>\n

o\u00a0\u00a0Many Directors and C-level executives aren\u2019t comfortable with AI and may not know who is using AI in their organizations and how they are using it.\u00a0This doesn\u2019t excuse them, as more and more, AI problems are becoming board problems, and\u00a0AI oversight is a board responsibility<\/a>.\u00a0Regulators are expanding and evolving the rules around AI including\u00a0Europe draft legislation 2021<\/a>\u00a0and\u00a0New York City 2023<\/a>.<\/p>\n

o\u00a0\u00a0Zillow<\/a>, a US real estate company created an AI business to estimate the value of homes and provide cash offers.\u00a0It shut down the business after only 8 months with a $304 million inventory write-down, and announced layoffs for 25% of its staff.<\/p>\n

o\u00a0\u00a0Data Privacy & Security- how personal and organizational data will be used within the AI tool needs to\u00a0comply with privacy laws<\/a>.<\/p>\n

o\u00a0\u00a0Intellectual Property – Canadian law has not yet provided guidance about when intellectual property laws will apply to AI-generated content, however we expect that\u00a0formal guidance will be issued<\/a>.<\/p>\n

o\u00a0\u00a0Liability \u2013 While there are challenges in determining\u00a0liability from AI-caused harm<\/a>, company leadership will need to anticipate the evolution of AI legal frameworks and balance that against the more immediate benefits of AI adoption.<\/p>\n

o\u00a0\u00a0ESG<\/a><\/p>\n

o\u00a0\u00a0Environmental – As AI models grow in size and complexity, so does the necessary computer processing power, which can carry a very large\u00a0carbon footprint<\/a><\/p>\n

o\u00a0\u00a0Social \/ Ethics – Companies that deploy AI for hiring, lending, housing, or insurance decisions need to consider ways to assess and, if necessary, remediate potential discrimination associated with those initiatives. Some AI applications have also been criticized for exacerbating income inequality, displacing large numbers of jobs, facilitating human rights abuses, and manipulating individuals\u2019 behavior.<\/p>\n

o\u00a0\u00a0Governance – For AI programs to meet increasing regulatory requirements, as well as emerging ethical standards, the risks described above must be identified and mitigated through appropriate corporate governance, including policies, procedures, training and oversight.<\/p>\n

o\u00a0\u00a0Unintended Outcomes \u2013 With all the risks, complexity and fast evolution of AI, there can be unintended consequences.<\/p>\n

Best Practices for Boards to Ensure\u00a0<\/span>Responsible AI Governance<\/a><\/h2>\n

o\u00a0\u00a0Monitor the evolving\u00a0regulatory environment<\/a>.<\/p>\n

o\u00a0\u00a0Usage: Ensure you understand who is using AI and for what purposes within your organization<\/p>\n

o\u00a0\u00a0Establish an AI governance framework.\u00a0Two examples to reference:<\/p>\n

o\u00a0\u00a0BSA Framework<\/a>\u00a0– Confronting Bias: BSA\u2019s Framework to Build Trust in AI<\/p>\n

o\u00a0\u00a0NIST Framework<\/a>\u00a0–\u00a0Overall AI Framework from U.S. Department of Commerce<\/p>\n

o\u00a0\u00a0Identify and assign accountable points of contact in both the C-suite and Board as part of overall ESG oversight.\u00a0Add AI governance to the Board skills matrix and have at least one person on the Board with this skill.\u00a0In the C-suite, the CEO or CEO should typically lead AI with CIO\/CTO providing input.\u00a0While the CIO\/CTO may have the most technical background in AI, AI governance is broader than the CIO\/CTO mandates.<\/p>\n

o\u00a0\u00a0Empowering a diverse, cross functional AI steering committee (including ethics) that has the power to veto.<\/p>\n

o\u00a0\u00a0Document and secure data sources.<\/p>\n

o\u00a0\u00a0Train people to get the best out of AI and to interpret the results.<\/p>\n

o\u00a0\u00a0Comply with privacy requirements<\/p>\n

o\u00a0\u00a0Designate (and communicate) the stages of the\u00a0AI lifecycle<\/a>\u00a0when testing will be conducted<\/p>\n

o\u00a0\u00a0Document relevant findings at the completion of each stage<\/p>\n

o\u00a0\u00a0Implement routine auditing\/monitoring<\/p>\n

Conclusion<\/span><\/h2>\n

AI is growing but so are the risks.\u00a0With some additional diligence, C-level executives and Board members can have the knowledge and tools necessary to navigate the complex terrain of AI governance. By staying informed, adopting responsible practices, and embracing ethical considerations, you can leverage AI’s potential while mitigating risks and creating a positive impact for your organization.\u00a0Governance nuances for specific industries and applications will evolve.<\/p>\n

The discussion on AI Governance is just getting started.\u00a0It would be great to hear your comments on this post and feel free to reach out to me directly if you wish.\u00a0Your feedback can influence the topics on my next blog.<\/p>\n

References<\/span><\/h2>\n

-While specific articles have embedded links above, my thanks to the ICD\u00a0Boardinfo service<\/a>\u00a0for their support in finding several of the articles<\/p>\n

–ChatGPT<\/a>\u00a0was referenced for parts of this blog, including the Conclusion<\/p>\n

-Blog photo created by Microsoft Bing Image Creator powered by DALL\u00b7E, with Prompt Engineering support from\u00a0Tobias Barber<\/a><\/p>\n

Hashtags<\/span><\/p>\n

Institute of Corporate Directors<\/a>,\u00a0Centre for the Governance of AI (GovAI)<\/a>,\u00a0University of Toronto – Rotman School of Management<\/a><\/p>\n

David R Beatty C.M., O.B.E., F.ICD, CFA<\/a>,\u00a0Sheldon Mahabir<\/a>,Ryan Resch<\/a><\/p>\n

#corporategovernance<\/a>\u00a0#boardgovernance<\/a>\u00a0#goodgovernance<\/a>\u00a0#boardofdirectors<\/a>\u00a0#boardeffectiveness<\/a>\u00a0#ai<\/a>\u00a0#artificialintelligence<\/a>\u00a0#artificialintelligenceart<\/a>\u00a0#machinelearning<\/a>\u00a0#innovation<\/a>\u00a0#management<\/a>\u00a0#technology<\/a>\u00a0#future<\/a>\u00a0#bigdata<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Introduction The\u00a0AI market size\u00a0is expected to reach $407 billion by 2027 up from $86.9 billion revenue in 2022 with 64% of businesses expecting AI to increase productivity.\u00a0While this growth is impressive, the risks of AI for corporations and its leaders are also increasing.\u00a0The Center for AI Safety (CAIS) created a\u00a0Statement on AI Risk, \u201cMitigating the […]<\/p>\n","protected":false},"author":18,"featured_media":1396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/posts\/1394"}],"collection":[{"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/comments?post=1394"}],"version-history":[{"count":4,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/posts\/1394\/revisions"}],"predecessor-version":[{"id":1398,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/posts\/1394\/revisions\/1398"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/media\/1396"}],"wp:attachment":[{"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/media?parent=1394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/categories?post=1394"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/elite-minds.com\/blog\/wp-json\/wp\/v2\/tags?post=1394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}