AI and boardroom decision-making

AI and boardroom decision-making: insights from Corporate Governance Institute’s co-founder Anthony Quigley on of governance’s hottest topics.

Artificial Intelligence (AI) is no longer a futuristic concept but a critical force shaping the modern business landscape. For senior leaders, especially boardroom directors, and non-executive directors (NEDs), the influence of AI is becoming increasingly hard to ignore. 

Yet, you and your colleagues are unsure how to proceed in this new era. While you don’t need to be an AI expert, a fundamental understanding (of how you can apply AI) is vital to ensure your business – and your own impact on the business – remains competitive.

One of AI’s most significant advances around AI and boardroom decision-making is the ability to process vast amounts of data quickly and accurately. Traditional decision-making has typically relied on human judgement, past experiences, and sometimes limited data sets.  This is most evident in many of the boardrooms across our country – populated by unqualified, sometimes entitled, often older, white men (women held only 25% of board positions).  AI is changing this dynamic by offering data-driven insights that help eliminate biases and blind spots. AI-powered tools currently analyse market trends, customer behaviour, and financial patterns in real time, providing decision-makers with more precise forecasts and risk assessments.

For example, JP Morgan Chase is using an AI system called COiN to review complex legal documents and processes, which would normally take thousands of hours, in just a few seconds. This reduces the risk of human error and ensures that compliance issues and risks are flagged early.

AI tools enable boards to foresee future business challenges and opportunities. This can be particularly beneficial in strategy sessions, where the stakes are high, and informed decisions can give a company a significant competitive edge.

Risk management is a vital tool that plays a critical role in the boardroom. AI has the ability to transform how boards assess and manage risk. For example, in the insurance sector, AI is being used to analyse past incidents of fraud, regulatory violations, or cybersecurity threats and detect patterns that humans might overlook. 

In corporate governance, AI is helping to automate compliance processes and flag potential legal issues before they escalate. This proactive approach ensures companies remain compliant with ever-evolving regulations while also safeguarding their reputation.

However, while AI helps mitigate risk, senior leaders must also address the risks posed by AI itself, such as algorithmic bias or over-reliance on AI systems without human oversight. For this reason, NEDs and board directors should develop a clear understanding of AI ethics and governance to ensure AI systems are fair, transparent, and accountable.

In another example, Twill, a digital freight logistics platform, is using AI for decision-making. AI helps Twill automate the management of its complex logistics operations, flagging potential supply chain disruptions, and optimising route planning. In the boardroom, these insights enable the leadership team to make faster, more accurate decisions regarding risk management, improving overall efficiency and reducing costs.

AI is already changing operations across many industries, from automating routine tasks to optimising supply chains and improving customer service. In the boardroom, AI is helping to streamline processes, enhance productivity, and reduce costs. For example, Robotic Process Automation (RPA) can handle routine administrative tasks such as data entry, freeing up employees to focus on higher-value activities. 

Yet, with operational efficiencies come strategic questions: how much should a business rely on automation? How will this impact the workforce, and how should leaders plan for future talent needs?

AI presents both opportunities and challenges for senior leaders, but its impact will largely depend on how well it is understood and implemented by you and your leadership teams. You must ensure that your business is not only using AI, but doing so responsibly and strategically. This means having regular discussions about how AI affects business models, the workforce, and the company’s ethical obligations. By fostering AI literacy and embedding responsible AI practices, you and your board can lead your company through the complexities of the AI era.

AI is reshaping decision-making by offering more accurate data analysis, improving risk management, and enhancing operational efficiency. Senior leaders must be prepared to navigate this new terrain with a focus on both strategic implementation and ethical responsibility. While you don’t need to be an AI expert, understanding its implications will help you lead with confidence in this rapidly changing world. 

AI and boardroom decision-making – The Corporate Governance Institute