Governance whitepaper demystifies AI for senior executives
A new report from Melbourne Business School is helping Australian organisations prepare for the transformative opportunities – and risks – of AI.
With adoption of ChatGPT eclipsing that of Netflix, Uber and Facebook before it, artificial intelligence has dominated public and private discourse since late 2022.
Many business leaders believe that the rise of AI will bring new risks and opportunities for their organisation, but lack a deep understanding of what they are or how to prepare for them.
Now, a new report from Melbourne Business School's Centre for Business Analytics is demystifying AI for senior executives and offering practical advice on how to govern AI at the enterprise level.
The Enterprise AI for Senior Executives whitepaper calls on boards and senior leaders to embrace the opportunities of AI technology, outlining a clear path forward informed by timeless principles of governance and oversight. "Because the technology is so new, and constantly evolving, many executives and boards wrongly assume that completely new methods are needed for governance," says Dr Gregory Hill, lead author and a member of the Centre for Business Analytics Industry Advisory Board.
"However, in reality, the risks and matters which need to be addressed with AI governance are the same ones boards have been dealing with for years – issues around ethics, privacy, transparency and fairness.
"They are not new AI-created risks or concerns."
The whitepaper provides key recommendations that boards can use to re-frame existing business concepts within an AI landscape in order to develop robust governance frameworks.
"The transformation of our economy to an AI-enabled one has been underway for over a decade, and the growing adoption of AI systems will only accelerate disruption," Dr Hill says.
"No one knows how a change of this magnitude will unfold; however, leaders who are open minded, and informed will be well-placed to shepherd their organisations through this major shift."
Don't wait for AI-specific legislation
One of the whitepaper's key recommendations for Australian executives is that they should not wait for AI-specific legislation before introducing effective governance measures.
"Australia is unlikely to have a single catch-all piece of AI legislation like the European Union," Dr Hill says. Instead, many AI issues are already regulated through existing legislation such as various anti-discrimination laws, the Privacy Act and the Australian Consumer Law. Self-driving cars, for example, are covered by the Transport Act.
"Changes will be continually drip-fed through existing legislation, so if you are waiting for it to settle, then don't," Dr Hill says.
"It'll be too late, and you will be too far behind the transformational change that is occurring."
Dr Hill hopes the whitepaper highlights the benefits to be had when organisations integrate AI into their business operations.
"As a business school, it is important that we speak about the opportunity for transformation and value creation that AI brings," Dr Hill says.
"Of course, this needs to be tempered with consideration for the potential harms and risks, but ultimately it will be enormously beneficial to society.
"Enterprises that cannot leverage AI systems will find themselves at an increasing disadvantage, and playing catch-up will become more fraught."
Download the full whitepaper Enterprise AI Governance for Senior Executives to learn how to implement a robust governance framework.
For more analytics information and research, visit our Centre for Business Analytics page.
To find out more about studying at Melbourne Business School, visit our Degree Programs and Short Courses pages, or learn about our range of services For Organisations.
