Swiss boards of directors have too little AI expertise

How a company uses GenAI and deals with the risks depends largely on its board of directors. Most Swiss companies are not yet exploiting the potential. Although the majority of boards of directors are addressing the issue, there is often a lack of knowledge and awareness of the key challenges and risks. This is shown by the semi-annual survey of almost 400 board members conducted by the swissVR association of boards of directors in cooperation with the auditing and consulting firm Deloitte Switzerland and the Lucerne University of Applied Sciences and Arts.

It is important for board members to address the topic and develop a clear strategy for their own company. While around half of the board members surveyed believe that GenAI has only become slightly more important for their company over the past two years, a quarter believe it has become much more important. Looking to the future, significantly less than half (39%) of respondents expect a fundamental transformation of their industry in the next one to three years. Almost as many (36%) do not expect this to happen for three or more years.

"Many boards of directors are aware of the increasing importance of generative AI, as the results of the swissVR Monitor clearly show. This makes it all the more important that their members deal with this technology and the consequences for their companies," says Reto Savoia, CEO of Deloitte Switzerland.

According to a large majority of the Board members surveyed, their companies are focusing on increasing efficiency and productivity (79%) in the company with the help of GenAI. Cost reduction (43%) or improved products and services (40%) follow at a clear distance. Strategic benefits such as the generation of new ideas and insights (34%) or increased innovation (through new products) and growth (31%), on the other hand, are mentioned less frequently.

Better risk management in small businesses

For most respondents (60%), potentially erroneous results from AI-generated content - i.e. incorrect or distorted information and data - pose the greatest risk to their companies. The confidentiality and protection of company and customer data when using GenAI and the issue of cyber security are also a concern for most board members.

As the survey also shows, most companies take the risks seriously and have responded with a range of measures. For example, the vast majority of the companies surveyed (86%) have carried out internal audits. Around two thirds (67%) have drawn up guidelines and trained their employees (61%). It is striking that significantly more small companies (77%) than large companies (48%) have introduced guidelines in their companies, particularly with regard to the risks of incorrect results as well as confidentiality and data protection.

Hardly any human control

Despite the risk of erroneous results being considered very high, only a few companies (17%) have all AI-generated content checked by at least one person - although human validation would be the most effective way to rule out errors.

"The lack of human control is a significant weakness when dealing with generative AI in companies. In view of the risks that AI entails, it is essential that companies have AI-generated content checked and validated by employees and do not simply trust AI blindly," says Isabelle Amschwand, President of swissVR.

Board members do not use AI themselves

The vast majority (70%) of the board members surveyed have dealt with the topic in the past year - mostly as part of the full board. However, the survey also shows that very few board members use AI applications themselves in connection with their mandate - more than half (55%) even rarely or never. This can be partly explained by the risks mentioned above. Board members of Swiss companies are therefore rather skeptical about the new technology. However, with greater familiarity and a better understanding of the technology, usage behavior could improve significantly.

More regular reporting by management on the use of generative AI in their own company would also improve understanding of the most important challenges and risks. So far, however, three quarters of the board members surveyed rarely or never receive regular reporting on this topic.

"It is pleasing that the topic of GenAI has reached the boards of directors. To ensure that this technology becomes a success and not a threat, they must act now. Our survey results show potential for optimization, particularly with regard to the use of AI tools as part of their mandate and in terms of the specialist knowledge required," emphasizes Brigitte Maranghino-Singer, lecturer at the Lucerne University of Applied Sciences and Arts at the Institute of Financial Services Zug IFZ.

Source: www.deloitte.com