By Srinath Sridharan
The inclusion of artificial intelligence (AI) in boardroom discussions has already become a pressing matter. The pervasive hype and euphoria surrounding AI demand a deeper introspection within corporate boardrooms, as the allure of technological advancement often obscures the nuanced risks and complexities inherent in its integration. This is why Indian boards need to pay more attention, listening and understanding.
First, there is the human risk of overestimating AI capabilities, at least for now. Despite advancements, human intelligence and cognition remain unparalleled, relegating the singularity concept to a distant horizon. Second, the allure of AI can lead to overconfidence. It’s vital not to be swayed solely by AI-generated responses, as even sophisticated models can produce random outputs devoid of correlation, as of now.
Also Read Pakistan’s Kashmir Over- Obsession is Suicidal The MV Ruen Episode: Payoffs from Investing in Naval and Air Power Tax burden on a minority: ITR filing has improved, but how long can less than 3% support the rest? The new govt must go in for a speedy rollout of the four codes passed in Parliament Third, achieving harmony between AI processes, risk mitigation strategies, and human expertise is paramount. The seamless integration of these elements into business systems and design ensures a cohesive approach to leveraging AI within corporate frameworks. Lastly, businesses must hedge against technological risks, recognising the need for robust contingency.
It is evident that AI’s impact extends beyond surface-level comprehension. Boards and corporate entities must invest time in understanding AI nuances, including emerging technologies like quantum computing. However, the reality of boardroom dynamics presents a challenge, with meetings often squeezed between hectic schedules. Moreover, embarking on an AI journey demands a meticulous understanding of risks, which evolve real-time. Rushing into AI adoption without laying a solid foundation is akin to courting disaster.
AI is no longer a distant concept confined to science fiction; it’s a tangible reality reshaping industries. Amid discussions of AI’s potential, there exists a less understood frontier: quantum computing. Quantum computing promises exponential leaps in computational power, challenging conventional paradigms of problem-solving and data processing. Boards must grasp the implications of quantum computing alongside AI, as it holds the potential to revolutionise algorithms, encryption, and optimisation techniques.
Boards have to spend time in understanding AI and what their management team is trying to do with AI. Board meetings leave little room for in-depth exploration of AI’s intricacies. However, this time constraint underscores the need for proactive measures, such as dedicated workshops, educational resources, and expert consultations. Boards must prioritise carving out time for AI education, recognising it as an investment in future competitiveness and resilience.
Learn all the risks first, as risk is a real-time continuous journey: Risks associated with AI encompass a wide spectrum, from data privacy breaches to algorithmic biases and operational disruptions. Risk is not a static concept but a dynamic, real-time journey. Boards must adopt a proactive stance, continuously assessing and mitigating risks throughout the AI life cycle. With the Digital Personal Data Protection Bill 2023 soon coming into reality, boards must exercise caution in their adoption of AI, as they face the threat of steep financial fines and reputational risks for any data breaches.
Don’t jump into the fray until you are ready with the base and core of what you want to do: Prudent boards understand the importance of laying a solid foundation. Rushing into AI adoption without a clear strategic road map risks squandering resources and diluting organisational focus. While AI presents numerous potential benefits for businesses, including improved efficiency and innovation, it also poses significant risks that cannot be overlooked. Instead, boards must undertake comprehensive planning, defining clear objectives, identifying suitable use cases, and establishing governance structures.
In the AI race, it is better to be the tortoise—slow and steady is the mantra: Prudent boards recognise the merits of a methodical approach. Incremental progress, marked by careful experimentation, iterative learning, and deliberate scaling, mitigates the risk of over-committing to unproven technologies or strategies. Only by balancing sustainability over speed, boards can navigate the complexities of AI adoption with confidence and resilience.
Don’t assume that management knows, that’s board hallucination: Board members must guard against the assumption that management possesses exhaustive knowledge of AI and its implications. Such complacency risks fostering a dangerous disconnect between boardroom discussions and operational realities. Instead, boards must cultivate a culture of curiosity and inquiry, encouraging open dialogue and knowledge-sharing between management and board members.
Having pilots and scaling only after multiple pilots is key: Pilot projects serve as invaluable learning experiences in the journey towards AI integration. By conducting pilots, companies can assess feasibility, identify challenges, and refine strategies before committing to large-scale implementation. Crucially, scaling initiatives should occur judiciously, guided by insights gleaned from multiple pilot iterations. This iterative approach minimises risks, optimises resource allocation, and fosters a culture of innovation and continuous improvement within the organisation.
We suddenly have forgotten ESG, net zero, sustainability, climate change, Web 3.0: While AI holds immense potential, it should not overshadow pressing issues such as environmental sustainability, social responsibility, and ethical governance. Boards must maintain a holistic perspective, balancing AI investments with commitments to ESG principles, net-zero initiatives, and sustainable business practices. By embracing a multidimensional approach to innovation, boards can navigate the complexities of the digital age while remaining anchored in principles of long-term value creation and societal well-being.
As India grapples with the paradox of more keypad-literate than literate citizens, the need for informed decision-making in the corporate landscape becomes even more pronounced. Thus, while AI presents boundless opportunities, navigating its integration into boardroom discussions demands a judicious balance of enthusiasm and pragmatism, ensuring sustainable corporate growth in an era of technological disruption.
Srinath Sridharan, Policy researcher and corporate advisor; X : @ssmumbai
By Srinath Sridharan
The inclusion of artificial intelligence (AI) in boardroom discussions has already become a pressing matter. The pervasive hype and euphoria surrounding AI demand a deeper introspection within corporate boardrooms, as the allure of technological advancement often obscures the nuanced risks and complexities inherent in its integration. This is why Indian boards need to pay more attention, listening and understanding.
First, there is the human risk of overestimating AI capabilities, at least for now. Despite advancements, human intelligence and cognition remain unparalleled, relegating the singularity concept to a distant horizon. Second, the allure of AI can lead to overconfidence. It’s vital not to be swayed solely by AI-generated responses, as even sophisticated models can produce random outputs devoid of correlation, as of now.
Third, achieving harmony between AI processes, risk mitigation strategies, and human expertise is paramount. The seamless integration of these elements into business systems and design ensures a cohesive approach to leveraging AI within corporate frameworks. Lastly, businesses must hedge against technological risks, recognising the need for robust contingency.
It is evident that AI’s impact extends beyond surface-level comprehension. Boards and corporate entities must invest time in understanding AI nuances, including emerging technologies like quantum computing. However, the reality of boardroom dynamics presents a challenge, with meetings often squeezed between hectic schedules. Moreover, embarking on an AI journey demands a meticulous understanding of risks, which evolve real-time. Rushing into AI adoption without laying a solid foundation is akin to courting disaster.
AI is no longer a distant concept confined to science fiction; it’s a tangible reality reshaping industries. Amid discussions of AI’s potential, there exists a less understood frontier: quantum computing. Quantum computing promises exponential leaps in computational power, challenging conventional paradigms of problem-solving and data processing. Boards must grasp the implications of quantum computing alongside AI, as it holds the potential to revolutionise algorithms, encryption, and optimisation techniques.
Boards have to spend time in understanding AI and what their management team is trying to do with AI. Board meetings leave little room for in-depth exploration of AI’s intricacies. However, this time constraint underscores the need for proactive measures, such as dedicated workshops, educational resources, and expert consultations. Boards must prioritise carving out time for AI education, recognising it as an investment in future competitiveness and resilience.
Learn all the risks first, as risk is a real-time continuous journey: Risks associated with AI encompass a wide spectrum, from data privacy breaches to algorithmic biases and operational disruptions. Risk is not a static concept but a dynamic, real-time journey. Boards must adopt a proactive stance, continuously assessing and mitigating risks throughout the AI life cycle. With the Digital Personal Data Protection Bill 2023 soon coming into reality, boards must exercise caution in their adoption of AI, as they face the threat of steep financial fines and reputational risks for any data breaches.
Don’t jump into the fray until you are ready with the base and core of what you want to do: Prudent boards understand the importance of laying a solid foundation. Rushing into AI adoption without a clear strategic road map risks squandering resources and diluting organisational focus. While AI presents numerous potential benefits for businesses, including improved efficiency and innovation, it also poses significant risks that cannot be overlooked. Instead, boards must undertake comprehensive planning, defining clear objectives, identifying suitable use cases, and establishing governance structures.
In the AI race, it is better to be the tortoise—slow and steady is the mantra: Prudent boards recognise the merits of a methodical approach. Incremental progress, marked by careful experimentation, iterative learning, and deliberate scaling, mitigates the risk of over-committing to unproven technologies or strategies. Only by balancing sustainability over speed, boards can navigate the complexities of AI adoption with confidence and resilience.
Don’t assume that management knows, that’s board hallucination: Board members must guard against the assumption that management possesses exhaustive knowledge of AI and its implications. Such complacency risks fostering a dangerous disconnect between boardroom discussions and operational realities. Instead, boards must cultivate a culture of curiosity and inquiry, encouraging open dialogue and knowledge-sharing between management and board members.
Having pilots and scaling only after multiple pilots is key: Pilot projects serve as invaluable learning experiences in the journey towards AI integration. By conducting pilots, companies can assess feasibility, identify challenges, and refine strategies before committing to large-scale implementation. Crucially, scaling initiatives should occur judiciously, guided by insights gleaned from multiple pilot iterations. This iterative approach minimises risks, optimises resource allocation, and fosters a culture of innovation and continuous improvement within the organisation.
We suddenly have forgotten ESG, net zero, sustainability, climate change, Web 3.0: While AI holds immense potential, it should not overshadow pressing issues such as environmental sustainability, social responsibility, and ethical governance. Boards must maintain a holistic perspective, balancing AI investments with commitments to ESG principles, net-zero initiatives, and sustainable business practices. By embracing a multidimensional approach to innovation, boards can navigate the complexities of the digital age while remaining anchored in principles of long-term value creation and societal well-being.
As India grapples with the paradox of more keypad-literate than literate citizens, the need for informed decision-making in the corporate landscape becomes even more pronounced. Thus, while AI presents boundless opportunities, navigating its integration into boardroom discussions demands a judicious balance of enthusiasm and pragmatism, ensuring sustainable corporate growth in an era of technological disruption.
Srinath Sridharan, Policy researcher and corporate advisor; X : @ssmumbai
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