At a recent corporate governance meeting attended by several hundred board members serving on companies of all sizes and types and in every industry, the question was posed about how many of them currently use AI. About half the directors in the room put up their hands. But when asked if they were engaging with AI in any depth to assist with their governance responsibilities, only 10% of the hands were raised.
Although anecdotal, this survey of directors shows both the limitations and the potential of AI to assist boards of directors. Using AI for information gathering and analysis is not widespread among boards. However, there are indications that this trend is catching on as part of the overall inroads AI is making into organizations, from the mailroom to the boardroom.
Now, the question becomes how board members can use this technology—efficiently and ethically. As a long-time board member, and a former chair and CEO of a $12 billion health care company, I am optimistic about AI as a contributor to problem-solving and decision-making. Such capabilities increase the likelihood that boards and management teams, alike, will adopt this technology—not as a replacement for human judgment, but as a tool that enables more informed decision-making.
AI has the potential to help board members become more knowledgeable and better equipped to engage in discussions with management about challenges, opportunities, strategy, and operational issues. Its biggest contribution for directors could be in supplementing the “board package” delivered throughout the year by the company to summarize recent performance, new developments, competitive challenges, and potential acquisitions. Board members are expected to read and digest this information before the next meeting so they can ask questions of management and engage in discussion. This information, however, is fed to the board by the company, which by necessity involves a degree of filtering to decide the amount of detail required and the depth of the discussion.
As the business landscape continues to evolve, companies and their boards need to keep pace with the change. Board members can better serve shareholders and carry out their fiduciary duties by learning how to use all the tools—including AI—at their disposal.
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