Dive Brief:
- Fifty-one percent of boards of directors lack rules and guidance on the use of AI, Deloitte found in a survey, exposing their companies to legal liability and putting confidential information at risk.
- Forty-seven percent of boards do not facilitate use of AI in their work, while 25% lack standardized AI but permit use of the technology, Deloitte said. Only 8% of boards use company-approved AI tools for committee processes, Deloitte found in its survey of corporate secretaries, in-house counsel and other governance professionals.
- “Board adoption of AI/GenAI remains early-stage and inconsistent,” Deloitte said. “Policies, guidance and governance practices are still developing,” the consulting firm said, adding “where policies exist, they tend to focus on security, confidentiality, acceptable use, legal considerations and recordkeeping.”
Dive Insight:
A recent breakout by two OpenAI systems while undergoing testing spotlights the importance of setting guardrails on the technology.
OpenAI said Tuesday that its systems went rogue during a cybersecurity test, hacking into the internet and penetrating the software of Hugging Face, which provides open-source AI tools.
The mishap underscores a challenge in developing and launching AI that bedevils both creators and users of the technology.
“Deploying an agent and governing one properly are two halves of the same job,” Avalara CEO Hugo Sarrazin said. “Right now, they’re moving at very different speeds.
“A team can have an agent running in a financial process within weeks,” he said in an email response to questions. “Governing it takes far longer, because it requires real organizational change.”
Finance, compliance and information technology need time to collaborate and overhaul control frameworks for employee use of the technology, he said.
“Meanwhile, boards, CEOs and investors are reading the same headlines as everyone else,” he said. “They want to know what the company is getting from agentic AI right now.”
Indeed, 92% of CFOs and top finance executives feel pressure to show that investment in artificial intelligence yields a decent return, and only 7% say their organization focuses more on AI governance than speed of adoption, Avalara found in a survey. Avalara is a provider of AI tax compliance software.
“Nobody claps for the control environment you spent six weeks building because it doesn’t show up in a board update as progress,” Sarrazin said. “CFOs end up being measured on one timeline and held accountable on another.”
Most company boards seek to raise awareness on AI, with 77% of respondents to the Deloitte survey noting briefings or education sessions for directors during the past six months. Only 10% of those surveyed said their board has not taken steps to increase AI competence and fluency.
Still, “while AI/GenAI usage appears to have become more commonplace across the broader workforce and core business functions, its use for board-level purposes seems to be comparatively new, uneven and still maturing,” Deloitte said.
“It will be important to watch how boards develop norms over time for using AI and GenAI to enhance effectiveness, streamline operations, and inform decision-making — while preserving the informed judgment, healthy skepticism and accountability that lie at the heart of good governance,” Deloitte said.
