Another flashback to 2015 – the year I felt boards really started to reap the benefits of articulating their appetite for risk, which inspired me to write ’What’s Your Appetite for Doing Business?’.  In my blog last week, I suggested three leadership moves you could take right now given the current level of uncertainty, one of which was to revisit your appetite for risk. In doing so, one item that must be on the menu is AI – specifically your appetite for engagement with and investment in AI (a topic on everyone’s lips).

However, there is a well-known problem: The difficulty of managing the risk of AI deployment in the business. And based on the letter APRA wrote to its regulated entities declaring its observation that governance of AI is well behind its roll out, it’s a significant concern given the Government Authority does not send a letter for minor ones.

With this in mind, articulating appetite is not as straightforward as applying your appetite for technological innovation, as while many have some experience governing digital transformations, the addition of AI creates a new, unfamiliar playing field.

Here are three tips to help you navigate this challenge:

1. Articulate Bold vs Safety First: Make conscious choices such as whether you are seeking productivity gains, improved decision making, workforce reduction through automation or new product development for accelerated growth. Are safety critical systems and customer facing decisions in or out? What impact are you ready to accept on workforce morale?
2. Require Escalation Points: Define who has delegated authority for AI developments and indicate which types of triggers require escalation to the board e.g.  privacy/security incidents, vendor concerns, decision points when there is no turning back.
3. Review Often: As your organisation’s AI understanding and maturity grows, dial your appetite up or down. At least quarterly.

If you have gone down this journey, I’d love to hear examples of what you came up with. 😊