As more companies and individuals are using artificial intelligence (AI) for more purposes, the use of AI in corporate boardrooms is becoming increasingly common. This, unfortunately, is exposing the pitfalls associated with directors’ use of AI—particularly when directors use AI without a clear understanding of the risks involved.
If you are a corporate director, what do you need to know about using AI in the boardroom? Here are some key considerations:
DO: Make Informed Decisions About Using AI in the Boardroom
Directors have a duty to ensure that they are making informed decisions about how they use AI in the boardroom. While using the right AI tools can add value and save time and resources in the right circumstances, directors must not broadly or blindly adopt AI tools without taking the time to understand the risks involved.
DON’T: Make Assumptions About AI Platforms’ Capabilities or Security
In this same vein, corporate directors must not make assumptions about AI platforms’ capabilities or security. Placing too much trust in AI platforms can lead to ill-informed decision-making; and, like all software applications, AI platforms must be thoroughly vetted to ensure that they offer adequate data security protections.
DO: Understand the Legal Risks Associated with Disclosing Corporate Information to AI Platforms
When corporate directors share information with AI platforms, the companies behind these platforms may have an obligation to disclose this information in discovery. Additionally, relying on AI is not an excuse for—nor is it a safeguard against liability for—directors’ negligence. From data security to discrimination, directors’ reliance on AI can present a host of other legal risks as well.
DON’T: Put Your Company’s Confidential Information (or Other Assets) at Risk
As a result, when using AI platforms, corporate directors must be sure that they are not putting their company’s confidential information (or other assets) at risk. In general, if a corporate director is unaware of the risks—or potential risks—associated with using a particular AI platform, then further due diligence is required prior to adoption.
DO: Leverage AI Where It Can Be Leveraged Effectively
Corporate directors can leverage AI in various contexts (after conducting adequate due diligence), and there is a case to be made that directors should leverage AI when they can do so effectively. For example, if an AI platform can be used to more accurately assess the risks and potential outcomes of a proposed course of action, then relying on AI may be the right choice in this scenario.
DON’T: Overly Rely on Generative AI for Substantive Research or Writing
However, there are also circumstances in which relying on AI clearly is not the right choice. For example, generative AI platforms have been shown to raise a host of issues—including potential copyright infringement issues—when used for substantive research and writing.
Contact the Fort Lauderdale Corporate Lawyers at Shaw Lewenz for More Information
For more information, contact Shaw Lewenz today. Call 954-361-3633 or tell us how we can get in touch online to arrange a confidential consultation.