Helping Boards to understand the impact of AI on their directors duties
Introduction
The client is a specialist provider of insurance and other safety services.
In March 2025, Frazer Walker was engaged to provide the Board with an overview of the progress of AI and its impact on their director’s duties for the organisation.
The Challenge
Like many Boards, directors had heard of the rush to Artificial Intelligence and how it should be used to transform and improve their business, however little was known on the impact to directors and the organisation of AI. What risks could easily be incurred without full knowledge of either Executives or Board, and what liability did this generate? Standards were being talked about across the globe, including the development of an Australian AI safety standard, but these had not yet emerged. Governance, Compliance and operational risks were compounding as staff from most organisations sought to experiment with these new Large Language Models, resulting in a range of actions from corporates, from banning and blocking AI websites through to allowing controlled experimentation only after training was conducted. Critical was the need to ensure no personal client information leaked out onto the web, or for further model training.
Our Work
Frazer Walker investigated the best case studies from tort law and known media leaks to identify potential breaches of Australian law, while also covering known cases in other jurisdictions and their results, highlighting the potential misuses of AI while also drawing attention to some of the key benefits of this new round of Artificial Intelligence. One of the directors (Ian) having built and implemented AI in a previous AI ‘summer’ for one of Australia’s largest insurers, brought other insights to the presentation to Board and Executive on this rapidly changing field, including the use of the Australian Institute of Company Director’s released information on AI for Boards.
The Outcome
FW presented to Board and Management:
- Latest case studies in both the risks with and the value of AI in their industry sector
- Where AI was headed in Australia versus other jurisdictions, and what industry impacts were flashpoints for AI and the law
- How boards and executive can acquaint themselves with this new transformative technology, and prepare for inevitable changes to strategy and execution
The presentation generated debate and questions for directors on their duties and how this new version of AI could impact them and the organisation in the coming near term.