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AI could diminish the power and influence boards have over organizations, according to a series of interviews conducted by Harvard Business Review. While it may seem routine to use AI applications so that board chairs can automate tasks like developing meeting agendas and forming board committees, HBR researchers wrote, that could actually lead to what HBR called “encroaching risk,” which happens when “the use of AI ends up weakening or eroding the board chair’s influence over power-conduit tasks.”.
The researchers interviewed 27 board chairs of companies listed on the Toronto Stock Exchange, with average assets of $9.04 billion and average revenues of $3.7 billion. Industries included industrials, energy, materials, real estate, IT, finance, consumer discretionary, and healthcare.
Three power-conduit tasks board chairs use
HBR identified three power-conduit tasks board chairs have: managing the agenda, summarizing the discussion, and reviewing board member performance.
“Leaving the task of creating the agenda to AI — based on, for example, how long each item has taken to discuss in the past — completely bypasses the chair’s strategic thinking,’’ HBR said. Chairs also use behind-the-scenes influence over the flow of information that AI can’t easily replicate. Summarizing discussions is something AI could easily do, “but it’s a powerful way for the chair to shape how the board understands things and the conclusions they reach.” In contrast, AI can miss nuances, such as what people don’t say or mood shifts, which an effective chairperson will pick up on by reading the room.
The technology is also not equipped to ensure the whole board is functioning well and has the right mix of skills and expertise.
Three ways to minimize encroachment risk
Some leadership positions, such as board chairs and C-suite executives, could be most susceptible to encroachment from AI, the article maintains. It’s important to figure out who should shape the organization’s direction instead of just carrying out day-to-day operations.
Once strategic roles have been identified, “work with those individuals to pinpoint tasks that are central to their ability to exert influence — and therefore not good candidates for automation with AI,’’ HBR recommended.
The ability to define the company’s long-term mission and vision requires a deep understanding of market trends, social values, and the motivations of key stakeholders.
It’s important to craft clear policies for where AI can be used and when to maintain oversight by humans to ensure the technology supports strategic decision-making, rather than replacing it, HBR said.
While AI may offer suggestions for how to structure an agenda, the board chair should make the final decision. Similarly, AI may generate summaries of discussions, but the chair should review and enhance them to ensure they are in line with the board’s objectives.
The goal is to use AI to enhance automation rather than erode leaders’ influence. A recent PwC article also offers guidance for boards on the strategic use of AI to provide effective oversight and align with business objectives, while considering risks.