A new survey finds that people boards are optimistic about the potential benefits of conceptual AI and artificial intelligence as new growth drivers.
Directors realize” the full potential of technology implementation requires enhanced chance management, security, and conformity measures to safeguard their organizations and stakeholders”, according to the 2024 BDO Board Survey of almost 250 people company directors.
Chance and development: a parasitic marriage
They are also exercising prudence, noting that development presents both a major opportunity and a risk.
Some 17 % of directors indicated that “advancing the use of emerging technology is a top strategic priority, while lagging implementation of emerging technology ( 72 % ) is a top-cited risk,’ ‘ according to the report”. Directors have a symbiotic relationship with danger and creativity, where the need to move immediately in line with consumer demand, opposition, and stakeholder expectations must be carefully balanced with effective risk management and oversight.
According to the review, either of these places could be harmed if not invested effectively in either. This may explain why cybersecurity ( 41 % ) and emerging technology ( 51 % ) are among the top areas that directors predict will see more investment in the upcoming year, according to the BDO report.
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Progress on emerging technologies application
The workforce may be ahead of them as board and management team consider possibilities for incorporating conceptual AI into their businesses, according to the report, citing a international study by Microsoft that found that 75 % of knowledge workers now employ It at work.
The BDO survey reveals that:
- 23 % of respondents are researching what new technology can do and finding out more about its drawbacks and benefits.
- 16 % of employees reported actively teaching themselves about new technology in their day-to-day jobs.
- 6 % said they have no idea what technology is emerging right now and are not interested in it.
Which business area might offer the best opportunities for GenAI use cases, according to directors ‘ opinions. However, 31 % of directors cited customer experience ( 16 % ) and product/service development ( 15 % ), indicating that the technology is viewed as a value-adding, top-line tool that organizations can use to capture growth and customer loyalty, according to the report.
Research indicates that early adopters have benefited from faster and more thorough data analysis, which can support personalized and custom content creation in market outreach and aid in product improvement, according to the report. Boards also believe that generative AI has the potential to improve efficiency across back-office procedures and crucial operations.
GenAI risks were also the subject of attention.
Boards are also pointing their wide-eyed fingers at GenAI, noting that they “have seen ample evidence that generative AI brings new risks.” Among them are widely reported hallucination incidents, where an AI output is incorrect or “entirely fictitious”. While some are relatively harmless, the report observed, others are potentially serious and can expose companies to fines, litigation, and reputational damage.
Among the biggest GenAI risks that respondents cited were:
- Generation of and/or reliance on incomplete information ( 19 % ).
- Inaccurate/biased inputs and/or output ( 16 % ).
- Data privacy violations ( 16 % ).
- Fear of job loss and damage to employee morale/loyalty ( 15 % ).
The BDO report supports the strategy that public boards are adopting, noting that they are “right to both invest in new technology development and improvement of risk management practices.” Both of these should be in alignment with the organization’s strategy and in support of executable goals and objectives”.
In order for directors to prioritize the most in-demand skill or experience ( 31 % ), as boards seek members whose expertise reflects their organizational objectives, according to the report, in 2025.
Additional investments made in cybersecurity, data privacy, and governance
Over a third ( 37 % ) of director respondents indicated that they are changing the treatment of and approach to cyber risk from an “IT responsibility” to a” company-wide responsibility”, the survey found.
Companies need strong oversight, real-time knowledge of and tools for identifying and protecting against emerging threats, as well as ongoing monitoring programs to reduce the risk of a cyber crisis and prevent damage and disruption should a breach occur, according to the report.
Respondents indicated they are investing in additional security measures and valuable expertise to safeguard their organizations, with 25 % of directors citing cyberattacks and other incidents as the most significant risk to their businesses over the coming year.
Additionally, 27 % said cybersecurity is one of the most in-demand board skill sets, and 41 % of directors plan to increase investment in cybersecurity, data privacy, and governance over the next year.
In addition, the regulatory environment is at the top of their minds, with 45 % of directors indicating that they are considering an external assessment, such as a systems and organization control ( SOC ) for a cybersecurity report or a maturity/gap assessment, to improve organizational readiness and program maturity. Further, 41 % of respondents cited improving internal processes and communication channels as their main concerns when describing cyber risk management and cyber incidents.
Boards must remain proactive
In addition to the survey findings, BDO claimed that board investment in education and training on the changing threat landscape, both at the leadership and company-wide levels, is continuing. In order to maintain high risk awareness, they are specifically conducting thorough vulnerability testing and conducting company-specific scenario planning.
The good news is that boards are “dialed in to the type and frequency of cyber information they receive from leadership, particularly the Chief Information Security Officer,” according to BDO. They are interested in learning how to improve methods for monitoring the effectiveness of prevention and detection efforts as well as for responding and reducing alleged or confirmed breaches.
However, BDO recommends that companies continue to sharpen their activities regarding management and oversight disclosures, document actions undertaken, and further enhance stakeholder communication. The firm advised members to seek resources such as CISA’s” Shields Up” guidance for Organizations.
