‘It’s ripe for disruption’: How governance teams are harnessing AI for smarter board communications

How can your board use AI in a smart and safe way? A recent Governance Intelligence briefing on AI for board communications: The next frontier of governance, held in partnership with Board Intelligence, shed light on what AI innovation means for directors, emphasizing both the opportunities and governance challenges it introduces.

Panelists discussed how they are encouraging their boards to embrace AI tools to enhance decision-making, streamline communication and improve efficiency – without compromising oversight, accountability or ethical responsibility.

During the session, Seth Gastwirth, deputy general counsel, assistant corporate secretary and general counsel at real estate company JLL, shared that his company uses its own secure instance of AI called JLL-GPT.

His wider team uses the technology to prepare corporate governance resolutions, update director biographies and prepare different types of certificates that are required, as well as using it to review some of JLL’s securities filings.

‘Our directors are also starting to use AI in how they are approaching their functions, some of that is extending to board communications such as how to respond to different types of emails. It has brought tremendous efficiencies but it has also improved the quality of the materials that we are generating both for our board and internally,’ he said.

Further, he said that one of the vital uses of AI was the additional insights the company could gain from the board evaluation process.

‘It’s not just about creating executive summaries of the key points of the board’s and commenting on risks or opportunities, but then comparing board evaluations from year to year, identifying trends, identifying potential actions that the board can use and getting very granular, leading to more robust and engaging discussions in the board room as a result.’

Sharing her insights from a technological standpoint, Niamh Corbett, head of Americas at Board Intelligence spoke on the potential of AI within the realm of corporate governance.

‘Board communications is a uniquely ripe area for AI and that’s because it sits at the intersection of high complexity, high consequence and – historically – very low efficiency, so it is ripe for disruption,’ said Corbett.

One of the trends that Board Intelligence has identified as an area of opportunity is the fact that boards may be drowning in information but are often starved of insights.

‘They don’t have any signal from the noise. That’s exactly where we feel AI can help and where we’re seeing the change is that AI is shifting that dynamic from what has been passive information consumption by board members to more active decision-making. We’re seeing AI become a real enabler of better conversations in the board room,’ she explained. 

When the question of what problems AI can help to solve was raised, Christine Battist, independent director and audit committee chair for Capital Southwest and Bolt, identified two key areas: operational inefficiencies and strategic blind spots.

Before you start to think about using AI, she said you should always ask a few foundational questions: What are we trying to solve or improve? Do we have clean structured data that AI can learn from? Do you have the right talent, both on the board and in management, to evaluate and implement AI effectively? Who owns the oversight and deployment?

‘AI offers a lot of efficiencies like the ability to synthesize materials, highlight themes or risks and anomalies as well as insights,’ she added. ‘AI can augment board thinking, but it is not going to be a substitute for board judgement – it’s still my fiduciary duty to review all materials cover to cover and be conversant.’

As conversation turned to the use of AI for governance and where it is likely to go, Sarah Fortt, deputy general counsel and corporate secretary at carmaker Ford, pointed out some Similarities with ESG and AI.

‘Firstly, they are both tools,’ she added. ‘Both suffer from a professional version of FOMO [fear of missing out], where people get very excited about an idea without necessarily having a lot of the expertise or details needed to implement that tool.’

Further, she said that both can suffer from a degree of greenwashing or – as its now known – AI-washing.

‘Both are trends that people get excited about, which is great because there’s a lot of opportunity there,’ she said.

Though the differences between the two tools are vast – for example, AI is arguably less political than ESG at present – but this may not always be the case ‘because AI similarly lends itself to some really important debates we can have as a society,’ added Fortt.

At this juncture, the application of AI in the world of corporate governance has become more a matter of how? and when? rather than if. As organizations continue to understand how best to use this technology in their operations, any reticence will only put them at a decided disadvantage.

‘The AI train is leaving the station,’ Corbett said. ‘If people don’t get onboard and understand how they can use it in their own organizations, then fast forward a few years and they’ll have been left behind.’

To watch the full briefing ‘AI for board communications: The next frontier of governance’ on demand, click here.