Five questions every board member should ask about their organisation’s AI strategy

The term artificial intelligence (AI) was first coined in 1956 by computer scientists looking to solve chess problems. Since then, the technology has obviously evolved, but the basic concept hasn’t. By simulating human intelligence, AI enables machines to learn and act in a way that’s increasingly reminiscent of you and me. The technology has had a significant impact on organisations over the years, reshaping everything from daily tasks and customer interactions to overarching business models and competitive positioning. 

AI’s evolution has accelerated dramatically in the past few years. It has also seen the arrival of generative AI, which presents new opportunities for innovation and growth.  

Indeed, a recent report by the Tech Council of Australia and Microsoft demonstrates that this new type of AI could contribute as much as $115 billion annually to Australia’s economy by 2030 and augment 44 per cent of workers’ tasks.  

But while AI holds more and more potential, it must be used effectively and in ways that align with an organisation’s strategies, values and regulatory requirements. For this reason, boards have a crucial role to play in ensuring its adoption is sustainable and successful. 

Here are five key questions you can ask as a director and direct to your C-suite and technology teams. 

1. Does AI align with our organisational strategy? Ensuring that AI complements and enhances your organisation’s objectives and market position is fundamental. This involves scrutinising whether AI technologies are in sync with your mission, vision and goals, and evaluating how they can elevate the organisational strategy to adapt to dynamic market needs. 

2. How are we addressing data privacy and governance? In a world where data is king, establishing robust data protection and governance is essential for building trust and compliance. Boards must assess the frameworks that are in place for safeguarding data. They must also evaluate the effectiveness of those frameworks and ensure they accord with global and local data protection regulations. 

3. What are the genuine use cases and business benefits? Identifying the right use cases for AI is critical. It’s about steering clear of the pitfalls of misalignment and ensuring initiatives resonate with real organisational value. This includes a detailed analysis of how AI can solve specific business problems, enhance efficiency and/or create new avenues for revenue. 

4. How will we measure the success and return on investment of AI adoption? Clear key performance indicators and diverse metrics are needed to gauge AI’s multifaceted impact, whether strictly financial or related to other less tangible benefits. Establishing measurable outcomes and continuously monitoring these against the set benchmarks allows organisations to assess the tangible and intangible benefits of AI. 

5. How are we managing risks and ensuring the responsible use of AI? Ethical considerations and risk management should be directing your organisation’s AI journey. Boards must instigate rigorous ethical guidelines and risk assessment frameworks to ensure that AI is used responsibly and does not inadvertently propagate bias or inequality. 

Addressing these pivotal questions lays the groundwork for unlocking the full potential of AI. Moreover, adopting the KY3C approach – knowing your cloud, customers and content – provides a structured methodology for deploying AI responsibly and transparently. 

The future is rich with possibilities, and through informed AI adoption, boards can truly drive innovation and prosperity within their organisations.