AI Notetaking in the Boardroom

As artificial intelligence (AI) solutions become more prevalent in organizations, their use is increasingly making its way into the boardroom. AI-driven transcription and summarization tools promise efficiency, accuracy and time-saving benefits; but their adoption in the boardroom creates unique risks that must be carefully evaluated and managed.

The following is intended to (i) outline some of the key risks associated with the use of AI transcription tools at the board level, and (ii) offer practical strategies for risk mitigation.

Key Risks of Using AI Transcription in the Boardroom

Confidentiality and Legal Privilege

Boards often discuss confidential matters relating to strategic direction, financial oversight, risk management, governance and personnel. When AI transcription tools, especially those powered by third party providers, capture or process such information, the risk of unauthorized access, use or other mishandling is heightened. These tools may introduce cybersecurity vulnerabilities that can serve as gateways for attacks, with board-level data being especially attractive to malicious actors. Without appropriate safeguards, there is also a significant risk that the confidentiality of such information could be compromised or lost altogether.

Board discussions may also include legal matters covered by solicitor-client privilege, which, under Canadian law, can be inadvertently waived through disclosure. This risk becomes more pronounced when using AI tools without robust contractual safeguards and clearly defined data-handling protocols.

Privacy

Adopting AI transcription tools in the boardroom raises several considerations under applicable privacy legislation and the Criminal Code. Depending on the circumstances, it may be necessary to obtain consent from board meeting participants before using such tools. Where such consent is required, it must be informed; as a result, securing such consent should include providing the following information to the participants:

1. that an AI tool will be used;

2. the purpose of its use;

3. any jurisdictions to which participants’ personal information may be transferred; and

4. depending on the circumstances, the name or title of an organizational representative who can answer questions about the collection and use of the AI tool.

The system-generated notification to meeting participants that an AI transcription tool is being used may not address the above details, and thus may not be sufficient to ensure informed consent. In practice, participants' consent could be granted on a standing basis so long as the underlying facts relating to the AI transcription tool remain accurate.

Chilling Effect on Discussion

Some directors may feel inhibited from speaking freely if they know an AI tool is transcribing their words, and attributing the discussion to individual speakers. This can undermine board candour, robust discussion and collaboration—especially if the scope and retention of data are unclear.

Accuracy

Many AI tools struggle to accurately identify and distinguish between multiple speakers in a group setting, which can lead to misinterpretation of context, nuance or tone and misattribution of contributions. As a result, relying too heavily on AI-generated transcription, summaries or minutes may produce inaccurate records that could pose challenges in the event of litigation and audits.

Recordkeeping

Board meeting minutes are required by corporate statutes; beyond satisfying the statutory requirement, however, minutes can also help demonstrate that directors took appropriate time and exercised due care in considering the matters before the board. Human judgment is required to produce minutes that may be helpful to directors in establishing a "due diligence defence" or a "business judgment defence".

As such, the meeting secretary should not give into the temptation to have the AI tool produce the final version of the formal board minutes, although this might seem to be efficient. Instead, consider using the AI tool to (at most) produce the first draft of the minutes, with that draft then thoroughly and thoughtfully reviewed and finalized by a human being, before being submitted for approval by the board.

Generally speaking, it is best practice that written notes taken by individual directors during a meeting be destroyed after the actual minutes are approved at the subsequent board meeting, so as to produce a single, formal record of the meeting.  To avoid inconsistencies or confusion regarding the official account of a meeting, any transcription generated by an AI tool should generally be treated in the same manner as other unofficial, written notes taken by individual directors.

Mitigating the Risks

Organizations looking to leverage AI transcription tools in the boardroom should consider the following risk mitigation strategies:

Business case

As with the adoption of any AI solution, organizations should develop a clear business case to ensure that a given AI transcription tool aligns with the board's needs and delivers measurable value.

Establish a Clear Policy

Organizations should develop and adopt written policies or guidelines specific to the use of AI during board meetings, including:

1. protocols for obtaining participants' informed consent;
2. approved AI transcription tools;
3. data handling protocols;
4. limitations on use (e.g., for note-taking only, not official minutes);
5. clarification that AI-generated transcriptions or other work products are working tools that remain subject to human review / oversight requirements; and
6. retention requirements for such work products.

Contractual Safeguards

To the extent that a third-party AI tool is being used, organizations should ensure that any applicable service agreements include provisions addressing:

1. confidentiality, including restrictions on how the service provider can use the information;
2. data residency (storing the information in Canada); and
3. indemnities for data breaches and any other unauthorized uses and/or disclosures.

Conduct Director Training

Organizations should ensure that board members understand how AI tools are used, what risks they pose and how those risks are being mitigated. Transparency and education can help alleviate concerns and promote responsible adoption.

Involve Legal Early

Legal counsel should be engaged when selecting, deploying or expanding AI tools in the boardroom. Counsel can assess privilege issues, evaluate risk and advise on compliance with applicable laws.

Conclusion

AI transcription tools offer opportunities to streamline boardroom operations, but not without risk. Accordingly, organizations should consider various legal and governance considerations before allowing an AI tool to become a silent participant in board meetings.

If you have any questions about how your organization may use and implement AI tools, we invite you to contact one of the authors of this article.