Artificial Intelligence - A Journey for Board Directors
By Emilia Tantar & Monique Bachner
ILA is launching a new course for Directors to learn about autonomous systems, and in particular AI, and various opportunities and risks associated with AI. This course “Artificial Intelligence; A Journey for Board Directors” is considered key to targeting the current low level of engagement and understanding from many Directors and their Boards on these important new topics which will transform not only the way we all do business but also the related opportunities and risks. The course will set Directors on a journey from definitions and frameworks, including the EU and Luxembourg AI strategies, to practices required to ensure ethical and trustworthy AI, a focus on risk management. This journey through fundamentals of AI governance and the board’s role in adopting innovations that leverage data to enable or deliver AI will lead to the final sessions which will focus on the functioning of “data driven Boards”.
AI for Boards. Why now?
The AI journey began largely with the first material AI business impacts perceived through the big techs with GAFAMA success built by relying on AI to reach impact via novel uses of data.
Beyond the buzzwords and fantastic discussions around possible “general AI”, three main factors have made AI tangible for any business, being, data everywhere, increased computing power and open access availability of AI algorithms and implementations.
Europe has seized the opportunity and momentum, with the European Commission releasing a European wide AI strategy in 2018. Since this strategy was shaped, a further fundamental evolution is Europe focusing on a trustworthy approach to AI for both business and society at large.
Additionally, the https://www.ai4europe.eu platform was launched as a common one stop-shop, providing AI support for businesses to foster excellence in AI, including training, access to AI and data experts, and various development tools.
AI anytime, anywhere? Boards will be impacted by the EU’s upcoming AI standards and regulation
A European Legislative framework for AI was proposed in April 2021, and will be implemented across the entire European market. This AI Act provides for a risk-based approach, and is expected to enter into force around 2024. This AI Act sets clear expectations and timelines for boards to prepare
This essential advancement provided by the European Institutions will not only providing tools, but also enable clarity in AI definitions and build standards, further enabling a regulated and clear European market for AI.
Standard Organizations have also begun work to provide the technical specifications needed to support regulation, for example ISO and IEC have joined forces and through the ISO/IEC JTC 1/SC 42 have already published needed elements around AI terms and definitions. These will further need to be transposed by European Standards Organizations and this is already ongoing work in CEN and CENELEC JTC 21.
Towards AI auditing: Boards must ensure a risk based approach
With the upcoming EU AI regulations, boards need to assess, understand, identify and manage AI and related risks, and of course identify challenges.
Through the upcoming course series we aim at providing not only an initial understanding of the field and existing market constraints, but also concrete plans for managing risks and ensuring the Board is meeting its responsibilities and avoiding liability when doing so.
One of the main challenges for AI systems is handling a new horizontal regulation of AI – especially in already highly regulated areas. For one of the concerned sectors, Luxembourg’s important financial one, the CSSF started preliminary analysis of the AI challenges already in 2018, and will need to further embed the EU AI regulatory context ahead of its 2024 implementation.
Smarter Boards: Governance through data requires better data governance
We should not forget that AI systems are human made and need to be human controlled. AI will not replace directors anytime soon. However, directors can enhance their capabilities by combining automation, AI and analytics and other new technologies to complement and enhance a board’s analysis and decision-making capabilities. Innovative uses of data can provide unique insights to enhance all areas, from dynamic KPIs and oversight of the Board’s delegates, to furthering strategy and risk management capabilities.
Governance enhanced by data is already happening. It involves reinforcing existing data sources, and of course therefore requires that boards start with a solid foundation of data governance. Boards are inherently limited in their foresight and decision making by the types and quality of data they have access to, as well as any bias or framing of that data. Biases can’t be always removed however through rigorous data governance bias related risks can be contained.
The course aims to introduce Directors to such possibilities and to demonstrate though interactive exercises various possibilities to enhance your Board’s capabilities by accessing not simply more data, but better data. The course will cover how to use the opportunities offered by new technologies for the Boards’ advantage.