The interplay between ethics and AI is a crucial frontier in the digital age. As AI advances at pace and delivers significant benefits to productivity and profitability, ensuring ethical considerations guide these developments is paramount. This requires balancing the drive for innovation with the imperative to address potential risks and societal impacts, fostering AI advancements that push technological boundaries while also promoting fairness, safety, and respect for human values.
To manage ethical AI we must first understand AI best practice
As part of my research for this piece, I first looked at how large public companies are leveraging AI in creative ways to drive innovation, efficiency, and competitive advantage. These applications are transforming industries, enhancing customer experiences, and enabling companies to solve complex problems more effectively. I wanted to gain an understanding of the benefits AI was delivering for businesses spanning multiple industries because to manage the ethics of AI well, we don’t need to only understand the risks it carries but also the multitude of benefits.
Retail giants are using AI to analyse vast amounts of customer data to personalise their online shopping experience. This includes personalised recommendations, dynamic pricing, and tailored marketing messages, which significantly enhance customer satisfaction and loyalty.
In finance, AI is being used for algorithmic trading, where trading decisions are made at speeds and volumes impossible for humans to match. AI analyses market data in real time to execute trades based on predefined criteria, optimising investment strategies, and managing risks more efficiently.
Manufacturing companies are deploying AI in predictive maintenance, using sensors and AI algorithms to predict equipment failures before they occur. This reduces downtime and maintenance costs, improving operational efficiency. AI-driven robots are also being used to automate complex manufacturing processes, increasing precision and productivity.
In the healthcare sector, AI is revolutionising drug discovery and patient diagnostics. By analysing vast datasets of medical information, AI can identify potential drug candidates much faster than traditional methods. Similarly, AI algorithms can assist in diagnosing diseases by analysing images, genetic information, or patient records with a level of precision and speed unattainable by human practitioners.
Energy companies are using AI to optimise the distribution and consumption of energy. AI algorithms forecast energy demand and adjust supply, accordingly, improving grid efficiency and reducing waste. Renewable energy companies are using AI to optimise the placement of wind turbines and solar panels based on wind and sunlight patterns, maximising energy production.
Lastly, in the realm of cybersecurity, AI is being employed to detect and respond to threats in real-time. By learning from historical attack patterns and continuously monitoring network traffic, AI systems can identify potential security breaches before they occur, enhancing the protection of sensitive data.
These creative uses of AI across different sectors illustrate the transformative potential of AI in large public companies. By harnessing the power of AI, these companies are not only improving their bottom lines but also offering better products and services, contributing to a more efficient, sustainable, and innovative future.
The results of these examples are so significant for the companies that deploy them, that their value must be balanced with any ethical implications they carry. For the retailers analysing customer data to personalise their shopping experience, are their customers aware that the retailer has access to this data? The same can be said for the pharmaceuticals analysing medical information to improve health outcomes. How do they ensure that their data is ethical? The role of the Board is critical for these listed businesses showing their industries what is possible with AI all the way through to the smaller industry players that are implementing AI to streamline operations and deliver efficiencies.
The role of the Board in ethics and AI
For Boards, this involves directors taking a proactive and informed role in ensuring that AI developed and deployed by their companies are done so with ethical considerations at the forefront. This process includes understanding the potential impacts of AI on society, the economy, and the environment, and making decisions that prioritise ethical outcomes for the business over profit.
To fulfil this role well, most directors require education and training that enable them to fully understand the complexities of AI and their potential consequences. This can also involve establishing an ethics committee specifically for AI or integrating ethical AI considerations into existing governance structures and decision-making processes. An AI ethics committee can be responsible for ethical risk assessment being an integral part of the AI development and deployment process for the business. An additional responsibility will be ensuring the business engages with stakeholders, including employees, customers, and affected communities, to understand their concerns and perspectives about AI. This stakeholder engagement will inform more ethical AI practices and policies that the committee feeds into the business.
Transparency and accountability
Transparency and accountability are crucial elements of ethically managing AI. As Boards, we must advocate for clear documentation of AI systems’ decision-making processes, making it easier to audit and assess their fairness, accuracy, and impact. This transparency extends to being open about the limitations and uncertainties associated with AI technologies. An AI ethics committee can be responsible for setting these requirements or it can be the responsibility of the entire Board.
Around the board table, we must also consider the broader societal impacts of AI, including privacy, security, job displacement, and inequality. Directors have a responsibility to ensure that our companies’ AI initiatives do not exacerbate social divisions or inequalities but instead contribute positively to society. This might involve supporting initiatives that use AI to address social challenges, improve accessibility, and foster inclusivity.
Collaboration is the key to ethical AI
Finally, collaboration is key to ethically managing AI. Directors should seek partnerships with other organisations, government and society to develop and adhere to industry standards and best practices for ethical AI. Boards and their businesses participating in wider conversations about the role of AI in society can help shape a future where technology serves the common good, respecting human rights, and dignity.
For Australian companies, integrating ethics and risk management in AI innovation involves designing AI systems that align with company values and managing risks without stifling innovation. McKinsey highlights the importance of “derisking AI by design“, embedding tools for model interpretability, bias detection, and performance monitoring into AI development processes. This approach ensures continuous oversight and consistency across the enterprise, promoting a balance between innovation and ethical responsibility.
In summary, directors play a crucial role in ensuring that AI is developed and used ethically, but we must also acknowledge the vast innovation opportunity it provides as we navigate this process.
Through education, ethical governance, stakeholder engagement, transparency, consideration of societal impacts, and collaboration, we can guide companies towards responsible AI practices.
Cheryl Hayman is an non-executive director, Ai Media Technologies Ltd, Silk Logistics Holdings, Beston Global Food Ltd, Guide Dogs NSW/ACT.