Samil PwC "Board of Directors Must Monitor AI Use and Oversee Risks"

‘Governance Focus’ Publication
Includes AI-Related Board Tasks and Roles

With the popularization of generative artificial intelligence (AI), accessibility and usability of AI have greatly improved, leading to claims that boards of directors should oversee whether they are appropriately identifying AI’s potential in connection with the company’s business strategy and managing and controlling related risks.

[Provided by Samil PwC]

On the 8th, Samil PwC Governance Center announced that in the recently published "Governance Focus (Issue 24)," it summarized and introduced four key challenges for boards of directors regarding AI’s potential. The four main areas that boards should address related to AI are ▲developing board approaches ▲capturing strategic opportunities ▲overseeing risks and controls of trustworthy AI ▲complying with new regulations.

A survey conducted last year by PwC US of 500 executives from major companies found that only 46% felt well-prepared for risks or failures related to AI algorithms, less than half. The report emphasized that boards should prioritize education on AI and generative AI.

A representative from Samil PwC Governance Center said, “Considering the ripple effects of advanced technology on industries and individual companies, the situation of domestic companies is likely not very different from that in the US. The changes and risks AI will bring to the corporate environment may exceed expectations. Every company should include AI’s potential and risks as regular agenda items for management and the board and closely monitor related issues and legislative trends.”

This issue also includes a special contribution written by Kim Jong-dae, Professor Emeritus at Inha University and a member of the Samil PwC Governance Advancement Research Group, titled “Strategic Use of ESG and Sustainable Management Governance.” He stated, “Governance itself is not a performance but a driver that determines a company’s economic, environmental, and social performance,” emphasizing, “Ultimately, building governance is about creating mechanisms for companies to act responsibly and consider all stakeholders, including shareholders.”

Regarding directors’ capabilities and expertise, he noted, “What is important for directors is the ability to mobilize diverse resources,” adding, “Directors with expertise to connect resources to business can contribute to corporate performance and efficiently carry out oversight duties across multiple areas.”

Additionally, this issue introduced a board culture assessment guide and checklist that identify behavioral factors hindering board functions, such as ▲threat rigidity effect ▲trap of increased immersion ▲underestimation of collective intelligence ▲uncomfortable meeting atmosphere. The guide also includes concrete suggestions for improving board culture.

This content was produced with the assistance of AI translation services.