How to Build the Board’s AI Competency

As artificial intelligence (AI) becomes increasingly central to business strategy and operations, board members must develop a solid understanding of AI to effectively oversee its deployment, manage its risks, and guide its responsible use within the organization. This requires assessing the criticality of AI to the business and implementing appropriate oversight and monitoring procedures.

AI presents significant business risks related to ethics, security, unintended consequences, and more that boards need to be aware of to provide proper oversight. Additionally, growing societal concerns around the ethical implications of AI, including as they relate to bias, privacy, and job displacement, require boards to consider their board composition and AI competency to be prepared for oversight and to stay current with future trends.

Key Competencies for Boards in AI Oversight

While not every board member needs to be an AI expert, having a general understanding of the technology is crucial. Access to an expert, either on the board or as an advisor, is essential to gain insight into AI’s impact on the business. There are several key competencies that every board of directors needs to develop to proficiently oversee AI:

1. Foundational AI competency: Board members should possess a basic understanding of AI, including machine learning, computer vision, algorithms, and how the technology works.
2. AI business assessment: The ability to assess AI’s impact on the business and determine where AI is mission-critical while implementing appropriate monitoring and reporting systems is necessary.
3. AI business judgment: AI competence involves not only technical knowledge, but also the ability to use business judgment when overseeing AI-related decisions for strategies, policies, investments, and risks.
4. AI governance: Board members should establish an AI governance framework and adopt best practices for oversight of AI matters involving strategy, planning, implementation, and monitoring.
5. Ethical AI practices: To understand the ethical aspects of AI and the implications of decisions, boards members must ensure that robust technology governance frameworks are in place to help mitigate risks and build trust with stakeholders.
6. Continuous learning: Given AI’s rapidly evolving nature, board members need to commit to ongoing learning and upskilling to stay current on the latest AI innovations and how they apply to the business.

How to Develop AI Competencies for Board Members

Ensuring proper oversight and governance of AI within an organization requires that board members develop a strong understanding of AI concepts, technologies, and their business implications. Building these competencies can be achieved through a multipronged approach, such as the following:

• AI education: Participating in AI education programs designed for non-technical professionals can help board members gain a general understanding of AI concepts and terminology and the basics of AI technology and applications. This can be achieved through online courses, industry groups, and educational institutions along with engaging AI experts for specialized training.
• Engage with AI specialists: Bringing in AI experts to advise the board and management can add significant expertise to assist the board in the journey to provide proper oversight. Through these experts, the board can gain insight into strategies, risks, and impacts. Experts can report on the latest trends and innovations that the board needs to know and how they can be applied to the business.
• Case studies and examples: Board members can learn from real-world case studies and examples of AI implementation in other organizations. Analyzing successful and unsuccessful AI projects can provide valuable lessons and insights that can inform decision-making.
• Collaborative learning: Board members can learn from each other by sharing knowledge and experiences related to AI. Establishing a culture of collaborative learning within the board can facilitate the exchange of ideas and perspectives on AI-related issues.
• Deep dive into AI strategies: Engage in thorough discussions with the management team on the company's strategies and plans for AI innovations. These discussions can add to the understanding of any potential business impacts and help educate the board on AI innovations and business evolution with the technology.
• Attend professional conferences: Actively participate in industry events, conferences, and peer-to-peer learning opportunities that focus on AI. These platforms can provide insight into what other companies are doing with AI and the lessons they have learned.
• Cross collaboration: Seek out diverse perspectives from both technical and non-technical stakeholders when discussing AI-related matters. This will ensure that all affected parties are considered when building AI strategies.
• Appoint AI experts to the board: Consider appointing a director with a technology background and AI acumen to the board to provide broader expertise on AI-related matters and gain insights needing further consideration.

Building board competency around AI-related matters is multifaceted, involving traditional and innovative educational opportunities. Each board has a different composition of board members with a diverse set of skills and backgrounds, so it is imperative to assess your board's readiness for the AI-driven future. Furthermore, each board member must evaluate their individual AI understanding and build their own learning plan. Preparing for the AI-dominated future is an ongoing process that demands attention in the boardroom.

Kim Box is an independent director serving on public and private company boards, including McGrath RentCorp, Applied Science, and NACD Northern California. She is the committee chair of compensation at McGrath and leads oversight of AI, cybersecurity, and digital transformation.