BDO in the Boardroom Risk Aspects of Technological Innovation May Boards NOT Be Thinking About
Jul 24, 2025
25:22
Human Resources and Workforce Impact:
- Bias in Automation: Ensure that automated HR processes undergo regular audits to identify and mitigate biases, particularly in candidate selection and hiring.
- Regulatory Oversight: Implement annual bias audits for automated employment decision tools to comply with regulations.
- Employee Surveillance: Review and update employee monitoring practices to ensure compliance with privacy regulations, and OSHA and HIPAA.
Regulatory Compliance and Legal Risks:
- Decentralized AI Regulation: Develop a comprehensive strategy to track and comply with AI regulations across different states.
- EU AI Act: Assess the impact of the EU AI Act on your operations and ensure compliance with its requirements, even if your systems are used within the EU.
- Terms of Service: Establish a process to monitor and review changes in terms of service for AI, other technology and communications tools, ensuring compliance and proper data usage.
Operational Resilience and Business Continuity:
- System Dependencies: Regularly evaluate AI systems for data representativeness and bias and adapt to real-time changes in company operations.
- Supply Chain Vulnerabilities: Conduct frequent audits of third-party components and vendors to identify and mitigate supply chain vulnerabilities.
- Cyber Threats: Update employee training programs to include awareness and prevention of deepfake scams and other sophisticated cyber threats.
Strategic Oversight and Accountability:
- Ethical Considerations: Form multidisciplinary task forces for AI adoption, including general counsel, to classify use cases based on risk levels.
- ROI and Uncertainty: Ask for detailed ROI estimates, timelines, and milestones for AI projects, considering the uncertainty and potential qualitative outcomes.
- Director Education: Encourage directors to engage in educational opportunities, such as NACD masterclasses and other governance-focused content, to enhance their understanding of AI governance.