Corporate Boards Contemplate AI’s Benefits and Risks

Estimated reading time: 3 minutes

Age of AI

AI is a big deal for businesses. In 2023, nearly all (95%) board members of public companies agreed that AI would impact their business, according to a survey by the National Association of Corporate Directors.

But as companies are keen to bring AI into their operations, executives are debating whether the risks outweigh the rewards.

Risks and Rewards

Generative AI has the potential to boost a company’s productivity, lower costs, and improve the quality of products and services.

But implementing AI also comes with risks. A commonly cited one is data privacy. AI firms have been criticized for using user data to train their large language models (LLMs). That could become particularly problematic for companies if proprietary company code were uploaded into these LLMs — which has already begun to happen.

Then there are worries about so-called “AI hallucinations”, which could result in legal or PR issues for businesses.

AI Advantage?

Companies that take the time and resources to build effective AI governance frameworks may be able to mitigate these risks while still enjoying the benefits of the technology.

Ethical AI use could even potentially help to attract investors, as a checkmark for environmental, social, and governance (ESG) factors.

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