Improved AI governance at the board level is necessary for Norway's $1.7 trillion sovereign wealth fund to successfully manage risk.

The chief governance and compliance officer of Norway's Norges Bank Investment Fund, Carine Smith Ihenacho, has stressed that boards must learn more about artificial intelligence (AI) and how to use it in their enterprises. Being a major investor in around 9,000 international businesses, the fund is a strong proponent of sound corporate, social, and environmental governance (ESG) standards.

Smith Ihenacho emphasized in a recent remark the vital role boards play in regulating the usage of AI. She made the point that, even though not every board member has to be an expert in AI, boards nevertheless need to understand how AI affects their company and set clear guidelines for its use. "Boards should be able to answer big-picture questions about AI policy, risk levels, customer interactions, and transparency," she said.

The Norges Bank Investment Fund, which focuses on industries like healthcare and keeps an eye on tech behemoths like Microsoft, Apple, Amazon, and Meta Platforms, has already interacted with the boards of its sixty biggest portfolio companies. This involvement demonstrates the fund's dedication to making sure AI governance frameworks are strong and efficient.

Although the fund is excited by AI's ability to promote efficiency and innovation, it also supports responsible AI practices. "AI can support innovation and productivity, but it must be managed responsibly to mitigate risks," said Smith Ihenacho.

One of the biggest investors in the world is taking a proactive approach to AI governance, which could have a big impact on corporate governance standards worldwide as businesses work through the ethical and technical challenges associated with AI.