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AI is quietly stepping into the boardrooms of major corporations, shaping strategies and advising decisions. The question now is whether AI could become a board member in the future. AI is entering the boardroom: this is not merely a search tool; Diligent, a leader in governance software, has introduced an AI Board Member persona to its governance platform. This digital director is described as capable of offering diverse professional perspectives—from a cybersecurity expert to a geopolitical analyst to an active investor. The emergence marks a milestone: AI is starting to participate in strategic thinking at the highest level. Diligent is not alone in this growing market. Lloyds Banking Group recently acknowledged deploying AI advisory for boards via the Board Intelligence platform. In the Middle East, Mubadala, the UAE sovereign wealth fund, has advanced with an internal AI named Maia to support the investment committee, while urging portfolio companies to use AI as a standing observer. Tools such as Gabii from Govenda and Nasdaq BoardVantage have already taken on the heavy lifting of managing and analyzing thousands of pages of meeting documents, preparing discussion content and minutes with high accuracy. About a year ago, when Diligent’s CEO surveyed leaders about an “AI director,” most were skeptical. Yet the rapid rise of AI-driven generative technology created a psychological push. Directors today fear falling behind if they do not adopt the technology soon. In fact, rejecting a tool capable of synthesizing vast knowledge such as AI is increasingly seen as a governance failure. Limitations of AI: Although AI holds enormous potential, the idea of granting AI voting rights faces legal hurdles that are almost insurmountable. Mark Babington of the UK Financial Reporting Council emphasizes: ‘The legal definition of a director never includes a black box sitting at the end of the boardroom.’ The core of corporate governance is fiduciary duty and loyalty. A flesh-and-blood director must be personally accountable before the law and shareholders. If an AI-driven decision leads to disaster, an algorithm cannot be prosecuted, and a line of code has no assets to compensate. Moreover, because AI can memorize everything indefinitely, boards often erase its memory after each meeting to avoid privacy concerns. Nevertheless, AI remains a useful ‘objective observer.’ It can detect risks or gaps that humans may miss due to herd psychology. According to Professor José Parra Moyano, this candor helps leaders gain a multi-dimensional view and make more precise decisions. A Wharton School study shows that while AI can make very logical decisions, it completely fails to understand human beings and company culture. Governance is not just data processing; it also requires trust and sharp judgment. AI can compute rapidly, but cannot grasp the subtle meanings in negotiations or build lasting trust between parties. As Samantha Kappagoda notes, AI remains a rigid, rule-bound tool, lacking ‘intuition’—the trait that helps leaders make pivotal decisions. In Buffett’s 2019 shareholder letter, he wrote that the most essential qualities of a director are ‘thinking and principles,’ not a robot-like process. The prospect of robot directors with voting rights may still be far in the future. Nevertheless, the era of AI-assisted boards has officially begun. AI will be treated as an advisor providing additional perspectives, rather than a replacement for humans. Ignoring AI now could mean falling behind, but entrusting the company’s fate entirely to machines would be a abdication of leadership responsibility. Source: FT.
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