This year, Generative AI (GenAI) became an indispensable tool for business leaders, offering numerous use cases to drive efficiency and enhance executive performance.
In this piece, we share advice for how board directors can use GenAI to prepare for their next board meeting, use AI as a thought partner in their board responsibilities, and bolster financial oversight with AI-driven insights.
A Practical Guide to Using AI in the Boardroom
#1: Have a Conversation With Your Board Materials
Imagine you’re preparing for an upcoming board meeting, and you have a stack of documents to review: previous minutes, agendas, and reports. You can feed those materials into an AI model using Retrieval-Augmented Generation (RAG) to then have a conversation with AI about that content.
Prompt examples: “I’m preparing for a board meeting. Here are the materials I’m reviewing. Be my partner in discussing these documents. I’d like to discuss them with you now.” After uploading the materials, ask questions like:
- “Do the materials address how the company plans to use AI?”
- “Are there other ways you think the company could be using AI?”
- “At which meeting did we cover our international expansion plans?”
- “What did the 2022 10-K say about new product lines?”
- “Summarize the key points from the last three board meetings’ notes and highlight the main issues we should focus on today.”
Remember to follow best practices around security and data protection when uploading confidential information. We’ll dive into best practices later in the article.
#2: Leverage GenAI as a Strategic Thought Partner
Imagine having a strategic assistant who never sleeps and can process an enormous amount of data in the blink of an eye. Let GenAI be that partner for you (and your organization).
For example, you can use GenAI to gather intelligence and stay ahead of competitors. Ask tools like ChatGPT to analyze competitor strategies or identify potential threats, like regulatory changes or shifts in consumer preferences.
Have AI analyze competitors’ 10-K filings to extract key points and identify trends. It can highlight critical areas like revenue growth, market expansion, or new product lines, and compare them to your company’s performance, enabling you to spot opportunities or risks early.
Prompt example: “Analyze the 10-K filings of our top three competitors. Identify key points related to revenue growth, market expansion, and new product lines. Compare these findings to our company’s performance, and highlight any trends or opportunities we should consider.”
#3: Strengthen Financial Oversight
Financial oversight is a critical responsibility for any board. Try uploading financial statements — income statements, balance sheets, and cash flow statements — and then ask ChatGPT to analyze the data sets.
Ask it to look for underlying issues or potential opportunities. If you’re working to set dividend policies, for example, have it assess historical data, profitability trends, and cash flow patterns to recommend optimal dividend payout ratios.
GenAI is also an excellent tool for reviewing, validating, and critiquing financial plans and budgets presented by management.
Prompt examples:
- “Evaluate the feasibility of a proposed budget based on historical spending.”
- “Analyze projected revenue growth and compare it to industry benchmarks.”
- “Assess the risks associated with any financial assumptions in the plan.”
While AI excels at data analysis, it’s most powerful when used alongside human expertise. AI can review, validate, and critique financial plans and budgets, but it still requires human judgment to interpret complex situations, address ethical considerations, and double-check the work.
Best Practices Around Security & Data Protection
When implementing the above use cases, you may be sharing highly confidential information with the AI software, including the board materials and your thought process. Be aware of the product you’re using and how it uses your data. If you’re using the company’s Copilot or ChatGPT subscription, you’re more likely to be safe, though it never hurts to confirm.
If you’re using your personal account, check how your data is used and adjust the settings as needed to protect yourself. For example, you can control whether ChatGPT trains the model based on your data or saves your history.
Wrapping Up: Leveraging GenAI in the Boardroom
Generative AI offers powerful tools that can transform how you approach your board responsibilities, enhancing everything from strategic thinking to financial oversight. Adapting these technologies in your board work will be key to staying ahead of the curve and guiding your organization forward.
NU Advisory Partners is an AI and tech-led retained executive search and advisory firm focused on senior executive, operating, and board positions. If you’re interested in learning more, get in touch here.