"There is no question that AI is materially affecting business models and operations. Now that it's getting serious attention from shareholders, employees, other corporate stakeholders, boards need to pay attention, too." Corporate Board Member MagazineIn the July/August issue of Corporate Board Member Magazine in 2006, an article by Randy Myers talked about ten insightful and reinforcing items of interest.
General Counsel to Directors: Your 10 Most Common Mistakes
The in-house lawyers think that you've got a lot to learn about risk, trust, and reward. And when there's trouble, you too often fail to follow the Boy Scout creed: Be Prepared. By Randy Myers
1. Not Asking Questions
2. Failing to Understand the Company and the Risks it Faces
3. Failing to Lead on Ethics and Compliance
4. Not Insisting on a Crisis-Management Plan
5. Speaking out in a Crisis Before the Facts are in
6. Relying on the Wrong Outside Counsel
7. Failing to Understand Attorney-Client Privilege
8. Underestimating Regulators
9. Giving too Much Leeway to Rainmakers
10. Getting Caught Up in the dilemma of False Options
And as Randy so clearly has stated: "Serving on a corporate board isn't easy. Avoiding these common mistakes should be."
We can't accept that No. 4 even is on this list. No. 2 and No. 3 is ever so common place. And No. 7 is not a surprise. But what continues to amaze even those professionals associated with consulting to the Board of Directors is No. 8.
Fast forward to 2019.
"The number of public companies disclosing artificial intelligence (“AI”) as a material risk factor in their SEC filings has grown exponentially from virtually none in 2016 to more than 80 this year alone." --By Lisa Fontenot and Cassandra Gaedt-SheckterThe Chief Risk Officer (CRO) is the independent keeper of oversight in the corporate enterprise. Should any organization be the subject of an investigation by the SEC, FTC or any other government regulator, they need to look to the CRO.
It's the job of any CRO to keep regulator awareness at a high level and to let the business be in charge of risk management. Whenever you see a CRO getting involved in managing the risks of the business, then the independence and clarity of oversight has been extinguished.
The General Counsel and the Chief Risk Officer must work hand-in-hand to follow the Boy Scout creed: