Unlocking the Power of Artificial Intelligence

Establishing a code of conduct for the use of artificial intelligence will be vital to protect company brands and reputation.

Throughout history, we’ve witnessed an unfortunate pattern where evil doers first embrace emerging technologies as governments and corporations lag behind.

Today, artificial intelligence (AI) stakes are colossal with its capability of fabricating any reality whatsoever. As the proliferation of AI continues to reshape efficiency, innovation, and productivity, businesses across various sectors are recognizing this transformation and potential. Boards and management must be at the forefront of understanding the ethical adaptation of this advancing phenomenon. They cannot achieve this without independent expertise.

Within the echelons of the board, risk committees need a fresh source of wisdom, cutting-edge insights, and unwavering oversight.

CEOs should seek an AI czar of unparalleled prowess—or alternatively—have an experienced AI consultant at the ready for when they are needed. This sage should enlighten and mentor the board and management on insights and training to navigate the labyrinth of AI. Beware of the temptation to appoint an information technology employee for their knowledge may prove insufficient.

How Did We Get Here?

The journey comprises more than a century of American ingenuity and history.

In today's technologically advanced world, AI is increasingly prevalent, so it may be easy to overlook the historical journey that led us to this point. From the groundbreaking introduction of assembly lines in the early part of the last century to the revolutionary advent of microprocessors in the late 1970s and culminating in the awe-inspiring creation of the World Wide Web in the 1990s, the seeds of AI were sown long before the concept as we comprehend it today took shape.

These remarkable milestones, as well as others, set the stage for an age of computerization, which has empowered us to harness data and analysis, dive into personal recommendations, and embrace a plethora of AI applications that have infiltrated numerous industries with their transformative potential.

These historic developments enabled computerization, data analysis, personalized recommendations, and other AI powered applications across multiple industries. Understanding these key processes and technologies throughout history is essential to appreciate the evolutionary path that brought us to this remarkable AI era we now inhabit.

AI Implementation Is Not Without Its Hurdles

There are three major challenges that boards and management will face when adopting AI. These could have significant negative impacts on corporate brands and reputation if companies don’t establish strategies to safeguard their interests.

Data privacy and security is one of the most critical concerns surrounding AI. Businesses collect vast amounts of data, which are often used to train AI models and make informed decisions. Compromise or mishandling of this sensitive customer information can expose personal information, resulting in severe consequences such as the erosion of brand and customer trust and damage to corporate reputation.

Bias and fairness are a significant challenge associated with decision-making algorithms. Models learn from historical data and if these data contain biases or reflect societal inadequacies, the AI system may perpetuate or amplify these biases, leading to discriminatory outcomes that can spark public backlash, legal action, and significant reputation damage. To mitigate bias, organizations must prioritize diverse and representative training data, regularly audit AI systems for fairness, and implement measures to address and correct bias when identified.

Boards must address ethical considerations to ensure responsible development and deployment. For instance, an anonymous AI system may have the capacity to make decisions that impact human lives, such as in health care or in autonomous vehicles.

Another recent example is offered by AI chat bots.

Tests by academics and media unveiled a disturbing reality: AI chat bots produce false and defamatory statements, and these can lead to bogus reports. The speed and global reach of AI-written posted content and “deep fakes” exasperate the issue, with providers initially resistant to acknowledging errors. Addressing these most serious allegations can take weeks, leaving boards, executives, risk managers, and insurers shocked and exposed to false information zooming through cyberspace at ludicrous digital velocity.

Ensuring these systems act ethically, with transparency, and in accordance with legal and moral standards is of paramount importance, and organizations should establish clear ethical guidelines and principles for AI use. Companies and their boards must also carefully consider the potential social impact of AI adoption, including job displacement and other social changes, and take whatever steps possible to mitigate negative consequences. Failure to address these challenges will result in public outrage, damage to brand trust, and customers fleeing.

An AI Code of Conduct

Businesses should adopt five key action items and publish them as an “AI Code of Conduct” on their websites for customers, investors, and other stakeholders to see.

First, adopt responsible AI principles by implementing ethical guidelines for AI development and usage, including transparency, fairness, accountability, and human oversight.

Second, invest in data governance by establishing protection protocols, encryption, access controls, and regular independent audits to safeguard customer data.

Third, develop migration strategies for prioritizing diverse training data, perform regular audits for bias, and implement measures to address and rectify bias in any AI system.

Fourth, engage with stakeholders with open and transparent communication to customers, employees, regulators, suppliers, media, and others to address concerns, build trust, and demonstrate a commitment to responsible AI use.

Finally, direct regulatory compliance to keep abreast of what will be an evolving environment and perhaps even conflicting laws on data privacy, fairness, and ethical standards.

How a company navigates these challenges will have decisively positive or severely negative consequences for its reputation. By implementing a code of ethics and protective measures, businesses will mitigate risk and establish responsible AI use, thereby earning trust and loyalty in an increasingly complicated and expanding digital world.