Artificial intelligence, data, analytics—and now by extension generative AI—are critical topics for boards. Discussing them effectively requires a deep understanding of the opportunities and challenges presented by these technologies.
Seventy-nine percent of executives expect generative AI to drive substantial transformation within their organization and industry over the next three years. To stay ahead of any challenges with implementing or scaling the technology, more than a third are using a formal group or board to advise on generative AI-related risks. Organizations expect generative AI to deliver a broad range of benefits, with the most common—at least in the short term—being improved efficiency and productivity.
As boards consider how to best leverage generative AI, it is essential to explore the topic from the following four angles.
Generative AI strategy and competitive positioning are critical considerations. Understanding how the organization’s competitors are using generative AI and how this technology may disrupt the broader industry is essential. The board should ensure strategic alignment to the organization’s strategic objectives and understand what current capabilities exist and which future ones are planned to enable competitive differentiation.
The workforce impact and talent management implications of generative AI are also critical. The board should consider how the organization’s workforce could be impacted by generative AI and what plans exist to address a potential shift in talent strategies. This includes assessing the skills and competencies required to implement and maintain generative AI systems and identifying potential gaps in the current workforce.
Risk management and compliance are essential considerations. The board should ensure that the organization has the necessary governance structures and regulations in place to ensure responsible AI development and deployment. This includes establishing clear policies and procedures for AI development, deployment, and maintenance, as well as ensuring that AI systems are designed and tested to mitigate potential risks.
Finally, the financial impact of generative AI is a critical consideration. The board should carefully consider the estimated return on investment (ROI) for generative AI initiatives, as well as the potential cost savings or revenue growth. By doing so, the board can ensure that the organization is realizing the full value of its generative AI investments and making informed decisions about future investments.
By exploring these four critical topics, the board can ensure that the organization is well-positioned to harness the power of generative AI and drive sustainable growth in a rapidly evolving business landscape.
