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Artificial intelligence is developing at a pace that is reshaping how organisations make decisions, manage risk and define accountability.
In We Must Pace the Frontier, Dario Amodei argues that AI capability development risks outpacing our ability to understand and control it. This creates an uncomfortable question for organisations deploying AI – how do you govern something that is evolving faster than your understanding of it?
The answer is not to retreat from innovation or create controls so burdensome that they impede responsible experimentation and meaningful change. For boards, the challenge is to encourage a culture that ensures AI adoption remains consistent with the organisation’s risk appetite, purpose, values and stakeholder expectations.
AI has significant potential to improve productivity, decision-making and access to information. Failing to adopt may leave organisations behind. Yet embracing AI without the right culture, safeguards and oversight creates risks of its own.
AI can amplify the culture that already exists within an organisation. Where an organisation values transparency, accountability and thoughtful decision-making, AI can reinforce those behaviours. Equally, where speed and productivity are valued over critical thinking or short-term results over long-term consequences, AI can amplify those behaviours too.
Amodei's view is that capability development should be paced so safety measures can keep up, with greater use of independent evaluators for verification. This call for moderation at the frontier of AI development raises a parallel question for boards: are the governance, risk and assurance processes within their own organisations keeping pace?
The answer is not to slow every AI initiative. It is to ensure management can distinguish between uses that can move quickly and those requiring greater scrutiny, human oversight or independent assurance.
Boards need to understand where AI is being used, what decisions it is influencing, what assumptions may be embedded within it and where management may not yet have all the answers.
The board should not become the implementation team, but neither can it simply delegate the issue to management. Effective oversight requires directors to understand enough to ask the right questions, challenge assumptions and recognise when further expertise or independent assurance is required.
Not every AI risk can be anticipated through policy. Organisations need people who are prepared to pause, question and escalate when something does not look right.
Consider:
Can employees question an AI-generated recommendation?
Can they raise concerns without being labelled anti-innovation?
Does management reward responsible use as well as productivity?
The board sets expectations on culture and oversees whether they are reflected in behaviour. Culture is a key element of the control environment.
AI is rapidly reshaping the relationship between organisations and their stakeholders.
Employees want to understand how AI will affect their roles and opportunities to exercise judgement.
Investors want confidence that AI is being deployed as part of a sustainable strategy – not simply as a productivity opportunity – and that its benefits are being considered alongside risks that could undermine long-term value.
Trust may come less from demonstrating certainty than from establishing how uncertainty will be approached.
Boards should be able to see that management understands where AI is being used, any significant risks, what remains uncertain and how gaps are being addressed.
The Company Secretary can help turn AI from a broad technology discussion into a governance issue the Board can see, question and oversee. This includes ensuring:
AI remains visible within the board’s annual work plan and material issues are surfaced in board papers;
material AI risks are connected to the enterprise risk framework;
directors receive appropriate education as AI capabilities evolve;
ethical and cultural considerations sit alongside financial and operational analysis;
stakeholder perspectives are brought into board discussions; and
board decisions and their rationale are properly documented.
Boards cannot anticipate or understand every development in AI. They can however govern the organisation’s capacity to learn.
Effective guardrails are not necessarily detailed policies, but capable management, informed directors, a culture that encourages critical thinking and governance processes that can adapt.
The challenge is not to choose between innovation and caution, but to ensure that the organisation’s capacity to govern AI keeps pace with its capacity to adopt it.
Culture becomes a critical control As AI adoption accelerates, it is even more important to encourage a culture where people feel able to question, challenge and escalate.
Boards need to govern the guardrails, not the technology Boards oversee the governance environment, risk appetite and culture in which AI is used.
Boards cannot govern what they cannot see Boards must have visibility of where AI is used, how it influences material decisions and where its impact may be less visible.
Trust comes from transparency about uncertainty Stakeholders need confidence that organisations understand what they do not know and how they will seek to address the gaps.
Where to find guidance on governing culture
The Australian Institute of Company Directors’ Governing culture in a complex world recognises that in more distributed technology-enabled organisations, culture can be less visible. This makes understanding and testing culture increasingly important.
Governing culture in a complex world (AICD, May 2026)
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To read more insight from Nicole Graham go here MPMS MUFG | Harnessing AI in the Boardroom - The Augmented Company Secretary
Nicole Graham General Manager, Corporate Governance
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