Insights: How AI can transform boardrooms

Artificial Intelligence (AI) has been a buzzword for a while now and with good reason. It’s transforming industries across the board, from healthcare to finance. One area where AI has the potential to make a significant impact is in boardrooms.

It can help board members make better decisions, improve efficiency, and mitigate risks, and it will reduce the costs of travelling and spare the logistics hassles of coordinating various directors congregating in a physical boardroom.

It has already transformed many aspects of our lives, from the way we shop and communicate to the way we work and learn.

Boards of directors are responsible for guiding companies and making strategic decisions, and AI has the potential to provide them with valuable insights and help them make better, data-driven decisions. Here are some ways AI might transform boardrooms and what this could mean for businesses.

• Augmenting the decision-making process: As a board member, you are responsible for making strategic decisions that will impact the future of the enterprise you are serving. However, decision-making is often hindered by limited information, biases, and conflicting opinions. AI can help you make better decisions by having real-time data analysis, predictive analytics, and scenario planning. Artificial intelligence algorithms can identify patterns and trends that might not be obvious to humans. This can help boards make more accurate predictions about market trends, consumer behaviour, and other factors that can affect a company’s performance. It can also help in evaluating different scenarios and predicting the impact of different decisions on a company’s financial performance.
• Improving risk management: Another transformation is by improving risk management. Boards are responsible for overseeing a company’s risk management strategy and ensuring that the company is prepared for any potential risks. Artificial intelligence can help to identify and assess risks more effectively with data from multiple sources, such as social media, news articles, and financial reports – also in monitoring risks in real-time and to flag any potential threats.
• Enhancing board diversity: One of the challenges facing many boards today is the lack of diversity. Boards that lack DEI struggle to make decisions that reflect the perspectives and experiences of different stakeholders. Artificial intelligence can help enhance board diversity by identifying candidates who may not have been considered through traditional recruitment processes.
• Automating administrative tasks: Board members often spend a significant time on administrative tasks like scheduling meetings, preparing agendas and taking minutes. Artificial intelligence can easily automate many of these tasks, freeing up time that can utilised on more strategic matters. For example, AI-powered chatbots can handle routine enquiries from board members and provide the information they need quickly.
• Driving board efficiency: Board meetings can be time-consuming and inefficient. With automation, non-strategic work can be out of the way as mentioned above. With natural language processing, AI can transcribe and analyse spoken language, enabling board members to search for specific keywords and topics in meeting recordings. This makes it easier to review discussions and identify areas for follow-up. Similarly, virtual assistants can help prepare for meetings by providing relevant information and insights.
• Improving board communication: Without effective communication, board members work below par. Artificial intelligence can change that by providing a platform to share information and collaborate on projects. Such collaborative tools can be helpful.
• Enhancing shareholder engagement: Finally, boards will enhance shareholder engagement with AI by analysing shareholder feedback and identifying key concerns and priorities. This promotes alignment with shareholder expectations and improvement of overall shareholder engagement.

AI has a growing impact on governance, but here are some challenges

As AI continues to evolve, it will likely have an even greater impact on the way boards operate. GCC enterprises considering AI may be better off remembering a few challenges such as:

• Data privacy and security. Artificial intelligence systems collect and analyse large amounts of data. This data needs to be protected from unauthorised access and use.
• Artificial intelligence systems can be biased, which can lead to unfair decisions. Boards need to be aware of the potential for bias and take steps to mitigate it.
• Boards need to be able to understand how AI systems make decisions. This is important for accountability and transparency.

Despite these challenges, the potential benefits of AI for boards are significant. Boards that embrace AI can gain a competitive advantage and create value for all stakeholders.

Dr M Muneer is co-founder of the non-profit Medici Institute.