With cutting-edge technology fast becoming a necessity in today’s business environment, boards must step up to the challenge of managing the ethical risks of artificial intelligence (AI), a new report advises.
Corporate Ethics in a Digital Age, released by the Institute of Business Ethics (IBE), sets out to examine the expertise that is required in the boardroom. It also offers practical advice about how the ethical challenges of AI can be addressed.
According to the IBE, boards need to consider the application of technology as integral to their discussions on risk appetite and risk management.
The board briefing report presents nine challenges around the use of AI and suggests questions for boardroom members to help address these challenges. Among the challenges are the following: avoiding bias; treating customers, employees and contractors fairly; dealing with cyber-attacks; and keeping data secure.
“Boards not only have to manage a new set of risks and opportunities. They do so in a world that is rapidly changing in ways that make it harder for them to exercise control, but they cannot duck the issue,” said Peter Montagnon, associate director of the IBE and author of the report.
He continued: “At their core these challenges fall naturally into board responsibility for risk appetite and risk oversight. They should not be ignored or put in a silo just because technology is complicated. Most of the key decisions are actually about how technology is applied, with the dilemmas being primarily philosophical and ethical.”
“This is very much a modern boardroom issue and one that must be prioritised, not put on the back burner”
The briefing noted that directors need to be able to ask the right questions, insist on answers they can understand and set limits. Boards also need to understand what and how technology contributes. The report added that while they need access to good advice, business experience, common sense and sound advice remain critical for directors.
Case studies are used to highlight the real-world dilemmas which boards are facing. The report also suggests that directors should ensure they are confident in the ability of their chief information officer or chief technology officer to give them the sound advice they need.
“Boards have to decide where to draw the line between the opportunities of using technology to further business objectives and the risk of inadequate controls which end up infringing individual rights or otherwise endangering the company’s reputation,” added Montagnon.
Commenting on the research findings, Rialto Consultancy director Richard Chiumento stressed that boards must take the trouble to fully understand the risks associated with technologies such as AI and some may not be immediately obvious.
“We are in a period of great change and board members must continually evaluate the impact new and emerging technologies will have on all areas of the business and identify where risks may come from today and in the future,” he said. “This is very much a modern boardroom issue and one that must be prioritised, not put on the back burner.”