swissVR Monitor: Boards of directors are aware of the importance and risks of AI, but they still lack specialist knowledge in this field

Most Swiss companies and their boards are not fully harnessing the potential of generative artificial intelligence (GenAI). The new swissVR Monitor shows that the topic is now being embraced by the highest levels of the management hierarchy. However, there is still a lack of specialist knowledge and insufficient understanding of the key challenges and risks for their own organisations. Furthermore, management is not yet providing regular updates on the use of GenAI within these companies. The latest survey by swissVR, Deloitte and the Lucerne University of Applied Sciences and Arts highlights the importance of board members gaining relevant skills in this field and appointing AI experts to the board or drawing on external expertise. 

How a company uses GenAI and deals with the risks depends heavily on its board of directors. Most Swiss firms are not yet using its potential. Although the majority of boards are addressing the topic, there is often a lack of knowledge and understanding of the key challenges and risks. This is revealed in the survey of nearly 400 board members, which is conducted every six months by the swissVR association of board members in partnership with the audit and consulting company Deloitte Switzerland and the Lucerne University of Applied Sciences and Arts.

It is important here for boards to deal with the topic and develop a clear strategy for their company. While around half of the board members surveyed believe that GenAI has only become slightly more important to their company in the past two years, a quarter feel that its importance has grown significantly (see Figure 1). With regard to the future, well below half (39 per cent) of respondents expect a fundamental transformation of their sector in the next one to three years. Almost as many (36 per cent) expect that this will not happen for at least another three years.

“Many boards of directors are aware of the growing importance of generative AI, as the results of the swissVR Monitor clearly show. It is all the more important for their members to address this technology and what it
means for their companies,” says Reto Savoia, CEO of Deloitte Switzerland.

According to the vast majority of board members surveyed, their companies are focusing on using GenAI to boost their efficiency and productivity (79 per cent). Cost reduction (43 per cent) is a distant second, followed by improved products and services (40 per cent). By contrast, strategic benefits such as the generation of new ideas and findings (34 per cent) and increased innovation (through new products) and growth (31 per cent) are mentioned less frequently.

Better risk management in small businesses
Most respondents (60 per cent) regard potentially incorrect results of AI-generated content – in other words, false or distorted information and data – as the greatest risk to their companies. Other concerns for board members are the confidentiality and protection of company and customer data when using GenAI and the issue of cyber-security (see Figure 2).

Challenges and risks of generative AI for companiesQuestion:

What are the key challenges and risks of generative AI to your company? (Please select all that apply.)

As the survey also shows, most companies take the risks seriously and have responded to them with a raft of measures. For instance, the vast majority of companies surveyed (86 per cent) have conducted internal audits. Around two-thirds (67 per cent) have drawn up guidelines and trained their employees (61 per cent). It is striking that far more small businesses (77 per cent) than large ones (48 per cent) have introduced in-house guidelines, particularly with regard to the risks of incorrect results as well as confidentiality and data protection.

Very little human monitoring
Despite the risk of incorrect results being rated as very high, only a few companies (17 per cent) have all AIgenerated content checked by at least one person – even though human validation would be the most
effective way of eliminating errors. 

“The lack of human monitoring is a major weak point in companies’ approach to generative AI. Given the risks associated with AI, it is essential that firms get employees to check and validate AI-generated content and do not just trust AI implicitly,” says Isabelle Amschwand, President of swissVR.

Board members do not use AI themselves
The vast majority (70 per cent) of board members surveyed have dealt with the topic in the past year, usually in board meetings. However, the survey also shows that very few board members use AI applications in connection with their duties – indeed, more than half (55 per cent) use them rarely or not at all. The abovementioned risks are one reason for this. Therefore, board members of Swiss companies are generally more sceptical towards the new technology. However, usage patterns could improve considerably with greater familiarity and a better understanding of the technology.

More regular reporting by management on the use of generative AI within their company would also improve understanding of the key challenges and risks. As things stand, though, three-quarters of board members surveyed receive reporting of this kind only rarely or not at all (see Figure 3).

“It is good that boards of directors are embracing the topic of GenAI. They need to act now in order to ensure that this technology becomes a success rather than a threat. Our survey results show potential for optimisation, particularly with regard to the use of AI tools in the context of their duties and the requisite specialist knowledge,” says Brigitte Maranghino-Singer, a lecturer at the Institute of Financial Services Zug IFZ at the Lucerne University of Applied Sciences and Arts.

About the swissVR Monitor
The six-monthly swissVR Monitor survey aims to capture the views of board members on business prospects, strategies and governance issues, plus – in this edition – their views on the focus topic of ‘generative artificial intelligence’. swissVR conducted the 16th survey between 15 May 2024 and 27 June 2024 in partnership with Deloitte and the Lucerne University of Applied Sciences and Arts. The 391 participants sit on the boards of listed companie and small and medium-sized enterprises (SMEs) and represent all relevant industries and sectors.

swissVR
swissVR serves the interests of board members in Switzerland and is committed to helping them improve their expertise and share experiences with other members. As an independent association, swissVR is run by board members for board members. With its services, it helps to professionalise boards of directors, promotes networking between board members from companies in all sectors, and gives its 1,200+ members access to relevant information and tailored training, including in cooperation with training partners. swissVR is aimed exclusively at people who actively serve on boards of directors. www.swissvr.ch

The Lucerne University of Applied Sciences and Arts – representing central Switzerland
The Lucerne University of Applied Sciences and Arts is the university of the six Central Swiss cantons. It comprises the School of Engineering and Architecture, the School of Business, the School of Computer Science and Information Technology, the School of Social Work, the School of Design, Film and Art, the School of Music, and the focus area of Health. It is the largest educational institution in the heart of Switzerland, with some 8,000 students, 12,000 people in continuing education (of which 5,000 on MAS, DAS and CAS programmes), almost 350 new research projects per year, and 2,070 employees. www.hslu.ch