New Guide on the Use of Artificial Intelligence in Boardrooms
Foley & Lardner LLP has published a guide addressing privacy and legal risks that board members may encounter when using artificial intelligence tools for corporate tasks.
A new guide published by Foley & Lardner LLP highlights the managerial risks, privacy concerns, and legal responsibilities associated with the use of artificial intelligence tools by corporate board members in business processes.
Artificial Intelligence and the Board of Directors
Artificial intelligence technologies are rapidly spreading from corporate operational areas to boardrooms, providing executives with support in research, drafting, summarizing, and testing assumptions.
Privacy and Security Risks
This technological convenience brings a significant managerial cost, as even a single prompt entered into the system can cause the leakage of non-public material information and privileged communications.
The Impact of Misleading Information
Responses presented fluently by artificial intelligence but which are materially incorrect have the potential to negatively affect board members' decision-making processes.
Case Study Analysis
A case study examining Sam, an independent director, highlights common risks such as uploading confidential merger and acquisition data to a personal ChatGPT account and relying on unverified artificial intelligence outputs in board discussions.
Need for Corporate Policy
To minimize such risks, companies need to establish artificial intelligence use policies specifically tailored for board members in order to ensure informed decision-making, protect privacy, maintain cybersecurity, and oversee the use of approved platforms.