Your board doesn’t need an AI specialist
What your board truly needs is AI literacy, CEO accountability, and a realistic view of potential risks. Forget about appointing a specialist and focus on building smarter oversight instead.
There’s a common belief that you need to appoint a board member with AI expertise. But I disagree. You don’t need a specialist—you just need to become more informed about AI. However, neglecting AI entirely could have disastrous consequences. Here’s why:
AI Is Not Just a Technology Issue—It’s a CEO Responsibility
Many boards wrongly treat AI as a purely technical matter and delegate it to the CIO or CTO. This is a big mistake. AI affects all aspects of the business, from operations to customer experience.
A recent survey found that 74% of global CEOs fear job losses within two years if they don’t achieve measurable, AI-driven business results. This highlights the need for their direct involvement, strategic oversight, and accountability. If CEOs leave AI strategy to their CIOs without the proper understanding to guide their boards, they risk making poor strategic choices, losing their competitive edge, and ultimately diminishing shareholder value.
Instead of adding just one AI specialist to the board, the priority should be ensuring that your CEO is held accountable and equipped to make informed AI-driven decisions.
AI Literacy is More Valuable Than AI Specialization
One reason CEOs are worried about unclear AI strategies is that their boards don’t have the knowledge to properly assess these strategies. This is a critical issue as it opens the door to misaligned management incentives.
While AI is complex, your board doesn’t need to be filled with machine learning PhDs. What’s needed is enough AI literacy to effectively evaluate the company’s AI strategy. Board members should be encouraged to participate in workshops, seek advice from external experts, and engage in informal learning about AI. This literacy enables the board to ask important questions and helps safeguard the company from costly and damaging errors.
Beyond just understanding, AI literacy encourages a culture of informed skepticism. Well-informed directors can challenge assumptions, carefully review proposals, and ask for clear, actionable explanations from management. This level of oversight is vital for effective governance in an AI-driven business world.
Specialists Can Be Too Narrow in Focus
An AI expert may be adept at discussing algorithms and machine learning, but can they connect AI to your business strategy and shareholder value? Often, the answer is no. Boards function better when they include experienced generalists who understand how technology fits into broader business contexts. Ideally, your board should include directors with a proven track record of integrating technology to drive business growth.
The real challenge is integrating AI into the company’s core operations. It’s more beneficial to have a director with experience using AI, machine learning, or data analytics to drive business outcomes. Such individuals can apply their technical knowledge in ways that align with business strategy, enhancing profitability and sustainability.
Experienced generalists can also spot opportunities and risks in areas like marketing, operations, and finance that specialists might overlook. Rather than focusing solely on deep AI expertise, boards should look for directors who can navigate these strategic intersections to foster long-term business success.
If your goal is cost-cutting, then hiring an AI consultant is the better route.
Ignoring AI’s Hidden Dangers is a Risky Move
Think deepfakes are just for viral videos? Think again. AI-driven misinformation, fraud, and even fake job applicants using AI-generated avatars are real and dangerous. If your board isn’t actively learning about these threats and implementing safeguards, you’re inviting significant trouble.
AI-related security risks evolve quickly, often faster than conventional cybersecurity measures can react. For example, AI-generated voices or deepfakes have been used in social engineering scams to defraud companies of millions. In some cases, deepfake technology has even impersonated company executives, leading to substantial financial losses.
Boards must stay informed about these evolving threats, ensuring that the company is protected by robust security protocols, employee training, and proactive risk management strategies.
Failure to Address Regulatory Challenges Can Be Costly
Have you ever heard of the “Russian nesting doll” data problem? This is when third-party data unknowingly sneaks into AI models—data that you may not be legally allowed to use. The consequences of such an oversight are far-reaching, potentially costing your company millions or even leading to the board’s ouster.
Another significant issue is what I call the “Unbakeable Cake” scenario. Imagine a customer invokes their “right to be forgotten,” but your AI models have been trained on their personal data, forcing you to discard multimillion-dollar AI investments because you can’t separate out that data. AI literacy helps board members anticipate and navigate these regulatory challenges, avoiding hefty fines and legal battles.
The regulatory environment around AI is still evolving, with new legislation emerging regularly across jurisdictions. The consequences of non-compliance can be severe, from significant fines to reputational damage. AI literacy ensures that board members understand these regulations and can take proactive steps to ensure compliance.
Conclusion:
Forget appointing a specialist to your board—invest in AI literacy instead. Your board must become savvy enough to oversee strategy, manage risks, and demand accountability from the CEO.
The AI revolution is already here—make sure your board is prepared to lead the way.