AI governance: A board’s responsibility

MARTINE HANNEVIK     Welcome to the Trust in Industrial AI video series, where we explore how to implement AI with speed and confidence in safety critical industries. In this very last episode of the video series, we'll wrap it all up by discussing the important role the Board of Directors play in taking advantage of the great opportunities related to AI, as well as in managing the new risks and ethical dilemmas arising from its use, especially within critical infrastructure. I'm your host, Martine, and today I'm joined by Klas. Welcome! 

KLAS BENDRIK     Thank you.

MARTINE HANNEVIK     Great, great to have you here. And I think we'll start with a with an important question. And from your perspective Klas, why should AI be a key discussion in every boardroom, especially for organizations working with critical infrastructure?

KLAS BENDRIK     Yeah, and it's a great question. And naturally AI is a significant advantage for many industries, many companies as we speak today. So most likely there have been very good discussions around AI and the opportunities with AI already in the boardrooms. And if not, the time is here and now to actually do it because it will impact industries, it will impact business models and it will impact how you do business today, including the people and social aspects of it and which specific topics should be on the agenda in the boardroom. Firstly, you, you naturally have the strategic impact, the strategic impact linked to your industry. How will AI impact including your business models and which type of skill set you need to be successful for the future. And this is also part where it impacts the competition, including your customers. Then secondly, the risk and governance aspect is also an important area, especially if you're in in the board that you need to cover. Then also we have the impact on the workforce. It's a human people touch that is essential as well in the role as being a board member. And also finally, the ethics and the societal impact is also an important part when it comes to the role of board of directors. Then naturally it also depends on which type of company you are. Are you an AI native company? Are you an existing company that try to explore it and all of a sudden you might be a 160 year old company that is embracing AI and the opportunity that comes with it.

MARTINE HANNEVIK     Absolutely. So four key topics that we should be exploring. And if we dive into the first one, strategic impact on the business, how can boards support the executive team in this area?

KLAS BENDRIK     First of all, they need to make sure that the management, including the company, has the right skill set when it comes to leveraging the opportunities with AI and that they are also supporting how they explore, innovate, try things out. But the basis for that is actually also to make sure that you have access to the right data with the right quality and to make sure that that data is safe to use as well.

MARTINE HANNEVIK     So that was a bit on the strategic impact, but you also mentioned the workforce, right? So what role does the Board of directors play in this area? 

KLAS BENDRIK     Yeah. And naturally when it comes to people, when it comes to the workforce, it is about the opportunity to use AI. But then you actually need to have the right skill set both to be able to do the change management internally and in collaboration with customers. But it's also about which type of skill set you need and which questions the board of directors are asking management when it comes to how do you actually future pure proof the organization. And those are really interesting questions to have. But then at the same time, it is important being a part of board of directors, not to step into the shoes of management, ask the right questions in the boardroom.

MARTINE HANNEVIK     Absolutely. And you mentioned future proofing and it's a risk doing nothing. But with AI, there are also new risks arising. And how, how should the board of directors work with risk and the governance related to AI in this area?

KLAS BENDRIK     It is important to work with the governance, having the guidelines, AI policy and how you work with it practically. For example, having do's and don'ts when it comes to the leverage of AI, but it, it is also important to make sure that you actually cover the right risk elements, no matter if it's linked to personal data, if it's linked to customer data, including your IP. But having these type of regulations in in place is important for board of directors to ask management around that, including the management system reviews that are normally being done on an annual basis. And I think these are important aspect that the board of directors needs to cover in their annual wheel work. So it taps into the way that they're working today. But it is also so that the board of directors also need to make sure that the AI related topics becomes an integrated part of the annual wheel.

MARTINE HANNEVIK     Absolutely. And when, when we're talking about risk, of course, one key aspect when we talk about AI is ethical dilemmas as well. And you mentioned that at the beginning. So what should boards consider here when we're thinking about both ethical and societal impact of AI?

KLAS BENDRIK     AI impacts society at large. It impacts industries and also the borderlines, especially when you come into safety, critical systems and industrial AI. Then the ethical and societal part is important. And that needs to be linked to the overall policies of the company and the organization. But it also depends on which type of company you are. Like I mentioned initially, are you an AI native company? Are you starting to explore it or are you actually already quite advanced? But the main point is the board of directors needs to make sure it is aligned with the other policies of the company. 

MARTINE HANNEVIK     And how would you say then it impacts the metrics, you know, how should you measure the, the progress, the impact without conflicting other KPIs?

KLAS BENDRIK     This is a very important part. So first of all, I think there is an interesting aspect of making sure that the board of directors are actually asking the questions to management, how does this impact your normal historical KPIs and make sure that AI becomes and the impact of AI becomes an integrated part of existing KPIs. But in addition to that, depending on which type of company you are, you can also have different KPIs. And if you are, for example, in the critical infrastructure part, then you can measure your time to response, how that is improving by using AI or actually how quality is increasing or maybe even top line or bottom line is increasing so that different aspects and different details around the measurement. But it is an important area for the board of directors to ask questions to the companies around that.

MARTINE HANNEVIK     Absolutely. So I think we've covered some key points to four areas that you mentioned on the, the strategic impact, the workforce, risk and governance, and also the ethical and societal implications. And if you could give one final advice to board of directors who are now working or maybe just getting started or have gotten quite far, what would it be?

KLAS BENDRIK     Number one: Make sure that you actually go out and see what the organization is doing. Do not, do not end up in only sitting in the boardroom getting a management story. What is happening on AI. Ask management to actually have real practical examples of how AI is being used. That is number one. Then actually do not only do it once. This is a continuous work. Make sure it ends up on the annual wheel 2 times, 3 times per year, becoming an integrated part of every business area division presentation that is being done. That they include what they are doing on the AI part. Then it becomes an integrated part of presentations and discussions in the boardrooms. And then also the aspect of risk governance is important. But the greatest learnings are when actually companies are doing and exploring, not only talking about it. And that is an important role for the board of directors to make sure that that is happening.

MARTINE HANNEVIK     And I think that's a great final piece of advice. Go out and do it to get started. Thank you very much, Klas, for your insights and for joining us today. And thank you very much to our audience for tuning in. This was the final episode of our Trust in Industrial AI video series, and we've hope that you've enjoyed it. If you have any questions or want to learn more about how we at DNV can support you with safe application of industrial AI, then please visit our website. If you have any suggestions for topics in potential future episodes, then please let us know and we will consider your suggestions. Thank you very much.