Guiding AI use: A governance framework for boards

Policies are catching up — and boards should too

AI is moving fast, but so are the conversations about how to govern it. There’s also growing guidance around privacy and data use. The Office of the Privacy Commissioner has emphasized that AI systems must respect core privacy principles such as consent, transparency, and explainability — especially when personal data is involved. International regulations may also affect your policy, especially if your organization does business globally.

For boards, this means preparing for greater scrutiny — not just from regulators, but also from customers, employees, and the public. You can prepare by ensuring that your AI systems are not only compliant, but also understandable and accountable. Can we explain how our AI systems make decisions? Are we documenting how models are built and tested? Are we conducting internal reviews or audits to ensure AI systems are working as intended?

These are governance questions — not technical questions. Boards must ensure that AI systems and how people use them are built to minimize unwanted risk, and that users are provided transparency on any bias built into the AI system.

Plan for the unexpected

Even the most well-designed AI systems can behave in unpredictable ways. AI failures — whether due to bias, malfunction, or misuse — can escalate quickly. Boards should gain an understanding of what an AI crisis looks like and update the organization’s crisis response plan to include AI. The updated plan should include a clear chain of command for decision-making related to AI and a communication strategy that prioritizes transparency and accountability.

This starts with scenario planning. Has the board reviewed what could go wrong and how the organization would respond? Are there business continuity plans in place for AI system failures, misuse, malfunction, or outages? Is the organization prepared to adapt quickly to new regulations or shifts in public expectations?

Boards should also ensure that AI systems are being continuously monitored — not just at launch, but throughout their lifecycle. This includes tracking key performance indicators and assessing periodic reporting on AI systems, including performance, risks, and ethical reviews.

AI is transforming organizations

AI is changing how organizations operate. This means it’s also changing what boards need to pay attention to. While the pace of AI development can be overwhelming, it is important to remember this isn’t a burden — it’s an opportunity.

It provides a chance for boards to lead with integrity, ask hard questions, and shape how technology is used in ways that reflect the organization’s mission and values. AI isn’t just about technology, it’s about people. Good governance helps keep this fact at the front and centre.

What AI good governance looks like in action

Your board of directors can use AI to enhance the governance of your organization in several ways:

Guide decision-making

AI can provide boards with deeper insights into market trends, competitive positioning, and performance metrics. These analyses can help support more informed strategic decision-making.

Manage risks

AI can continuously monitor for emerging risks in areas such as cybersecurity, regulatory compliance, financial irregularities, and operational vulnerabilities. This helps give boards early warning signs and enables predictive risk assessments.

Comply with regulations

AI systems can track evolving regulations across jurisdictions. This helps automatically flag compliance gaps and ensures the organization stays current with changing legal requirements.

Increase meeting efficiency

AI can automatically generate meeting materials, summarize lengthy reports, track action items, and create meeting minutes. Streamlining these board processes enables directors to focus more on strategic discussions and less on administrative tasks.

Monitor performance

AI dashboards provide real-time visibility into key performance indicators, sustainability metrics, and operational data. This helps boards maintain better oversight between meetings.

Analyze stakeholders

AI can analyze stakeholder sentiment across various sources, including social media, investor communications, and employee feedback. This helps boards better understand external perceptions and concerns.

Key takeaways: Your boardroom checklist

AI is transforming organizations and industries — and there are table-stakes actions that your board needs to take. Before your next board meeting, ask yourself:

• Do we know where and how AI is being used across the organization, and what decisions it is influencing?
• Are we confident that AI systems are aligned with our values, and being tested for fairness, bias, and inclusivity?
• Have we defined clear roles, responsibilities, and escalation paths for AI oversight?
• Are we building AI systems that are explainable, auditable, and ready for regulatory scrutiny?
• Do we receive regular updates on AI-related risks, performance, and emerging trends?
• Have we reviewed potential failure scenarios and updated our crisis response plan to include AI failures?
• Are we investing in AI literacy at the board level to ensure informed oversight?