AI buck stops with boards
Summary
In Accounting and Business, the magazine of ACCA, James and Charlotte Fallon Smith argue that the use of artificial intelligence has run ahead of its governance. Their answer is not new principles: clear ownership, verified controls and meaningful oversight still apply, and matter more for systems that move faster and are harder to explain.
Boards should ask to see completeness, accuracy and timeliness measures for each system, and what triggers action when one fails. One senior person should own each system end to end, with the authority to switch it off, and human oversight needs set points where a person must step in. A board whose learning stops at management updates is, in their words, “not governing AI but observing it”.
Three key points
- The use of artificial intelligence has outrun its governance, and the answer is proven principles, not new ones.
- One senior person should own each system end to end, with the authority to switch it off.
- A board that only receives management updates is observing the technology, not governing it.
Disclosure: Charlotte Fallon Smith founded Fallon AI, a consultancy that works with founders, boards and senior leaders on artificial intelligence, and James is its strategic advisor.
Read the full article
The summary above draws on a longer article. Accounting and Business, the magazine of ACCA, publishes it in full, including what a board should ask to see for each artificial intelligence system.
Insights
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A questionnaire is unlikely to show the real dynamics of a board, so a rigorous review should rest on the time the reviewer spends with directors.
Explore your own question further
In a particular organisation, the detail can change how these points apply. James is happy to hear from anyone weighing them up for their own board, audit function or deal. This page summarises an article published elsewhere, and is not advice on any particular situation.