When Bradford Newman started campaigning for more artificial intelligence expertise in the C-suite in 2015, “people laughed at me,” he said.
Newman, who leads global law firm Baker McKenzie’s machine learning and AI practice in its Palo Alto office, added that when he mentioned the need for companies to appoint a chief AI officer, people usually responded, “What is this?”
But with the use of artificial intelligence growing across the enterprise, and with questions about AI ethics, bias, risk, regulation and legislation currently swirling across the business landscape, the importance of appointing a chief AI officer is clearer than ever, he said.
That recognition led to a new report by Baker McKenzie, published in March, entitled “Risky Business: Identifying Blind Spots in Corporate Oversight of Artificial Intelligence.” The report surveyed 500 US-based C-level executives who self-identified as part of the decision-making team responsible for the adoption, use, and management of AI-enabled tools at their organization.
In a press release accompanying the survey’s release, Newman said, “With the increase in state legislation and enforcement of regulations, companies need to step up their AI oversight and governance game to ensure their AI is ethical, and protect themselves.” appropriate management of their risk exposure to protect against liability.”
Enterprise blind spots on AI risk
According to Newman, the survey found significant blind spots of companies related to AI risk. For one, C-level executives have exaggerated the risk of AI cyberattacks but downplayed AI risks related to algorithm bias and reputation. And while all executives surveyed said their board has some awareness of the potential business risks of AI, only 4% rated those risks as “significant.” And more than half thought the risks were “fairly significant”.
The survey also found that organizations “do not have a solid understanding of bias management once AI-enabled tools are in place.” For example, when dealing internally with implicit biases in AI tools, only 61% have a team that rates data up or down, while 50% say they can override some — not all — AI-powered findings.
Additionally, the survey found that two-thirds of companies do not have a chief artificial intelligence officer, leaving AI oversight in the domain of the CTO or CIO. At the same time, only 41% of company boards have an AI expert on their ranks.
A turning point in AI regulation
Newman emphasized that a greater focus on AI in the C-suite, and especially in the boardroom, is a must.
“We are at a tipping point where Europe and the US will regulate AI,” he said. “I think companies will react miserably on their hind legs because they just don’t get it – they have a false sense of security.”
While opposed to regulation in many areas, Newman contends that AI is fundamentally different. “AI needs to have an asterisk because of its impact,” he said. “It’s not just about computer science, it’s about human ethics … it’s about the essence of who we are as human beings and the fact that we are a Western liberal democratic society with a strong view of individual rights.”
AI is also different from a corporate governance perspective, he continued: “Unlike, for example, the finance function where dollars and cents are properly accounted for and reported within the corporate structure and disclosed to our shareholders, artificial intelligence and data. Science involves law, human resources and ethics.” , he said. “There are a multitude of examples of things that are legal but not in line with company culture.”
However, enterprise AI tends to be fragmented and disparate, he explained.
“There’s no catch-all rule where the person who means well can go to the C-suite and say, ‘We have to comply. We have to train. We need compliance.’ So it’s still kind of theory, and C-suites don’t typically respond to theory,” he said.
Finally, Newman added, there are many internal policy actors around AI, including AI, data science and supply chain. “Everyone says, ‘This is mine,'” he said.
The need for a senior AI officer
What will help, Newman said, is the appointment of a chief AI officer (CAIO) — that is, a C-suite-level executive who reports to the CEO at the same level as a CIO, CISO, or CFO. The CAIO would have ultimate responsibility for overseeing all things AI in the company.
“A lot of people want to know how a person fills this role, but we’re not saying that the CFO knows every financial calculation that goes on deep within the organization — but reports to them,” he said.
A CAIO would thus be tasked with reporting to shareholders and externally to regulators and governing bodies.
“Most importantly, they would play a role in corporate governance, oversight, oversight and compliance on all AI issues,” Newman added.
However, Newman admits that the idea of installing a CAIO would not solve all AI-related challenges.
“Would it be perfect? No, nothing is – but it would be a big step forward,” he said.
The Chief AI Officer should have a background in some facets of AI, in computer science, and some facets of ethics and law.
While just over a third of Baker McKenzie survey respondents said they currently have “something like” a chief artificial intelligence officer, Newman thinks that’s a “generous” statistic.
“I think most executive boards are lagging behind miserably and relying on a patchwork of chief information officers, chief security officers or HR heads sitting in the C-suite,” he said. “It’s very cobbled together and not a real job description held by a person with the kind of oversight and matrix responsibility that I’m talking about as far as a real CAIO is concerned.”
The future of the chief AI officer
Today, Newman says, people don’t ask, “What is a chief AI officer?” So much. Instead, organizations claim they are “ethical” and that their AI is not implicitly biased.
“There is a growing awareness that the company needs to have oversight and a false sense of security that the oversight that currently exists in most organizations is sufficient,” he continued. “It won’t be enough for the regulators, the enforcers and the plaintiffs’ attorneys to come – if I switched sides and started representing the consumers and the plaintiffs, I could poke huge holes in the majority of corporate oversight and governance for.” AI.”
Organizations need a chief AI officer, he stressed, because “the questions this technology is asking go well beyond the zeros, the ones, the datasets.”
Organizations are “playing with live ammunition,” he said. “AI is not an area that should be left to the data scientist alone.”