Why Having a Chief AI Officer Should Matter to HR

By Nicole Lewis April 14, 2020
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chief artificial intelligence officer

​Companies using artificial intelligence (AI) across their business units should consider creating a C-suite position to oversee how AI is used and guard against the risk of making bad decisions based on biased algorithms, experts say.

Only a few companies, like Levi Strauss & Co, have established a chief artificial intelligence officer (CAIO) position, and fewer have created a C-level position dedicated solely to AI ethics. 

Brian Kropp, chief of research in the HR practice at Gartner, said chief technology officers and chief information officers will struggle with handling AI-related decisions and ethical dilemmas. 

"CTOs and CIOs are going to be thinking about the role through the lens of how they can make the technology work," Kropp said. However, "artificial intelligence is not a question of how you get the technology to work; it's a question of how do you think through the implications of the technology?"

AI and the HR Department

A natural home for AI ethics responsibilities could be the HR department. HR professionals understand workplace dynamics and can use their skills to balance considerations that lie between innovation and ethics, Kropp said. 

"From our perspective, HR has that sweet spot of being ethically aware and innovation-minded. They can strike the right balance between these two tensions that exist," he said.

Kropp envisions that chief artificial intelligence ethics officer (CAIEO) as the person who will create the ethical bill of rights that will govern how the company uses AI, where it will be used and how the company will make sure AI is used in the most appropriate way. This role is different from the CAIO, who will be charged with identifying new opportunities to use AI to create products and services for the company's customers.

Bradford Newman, chair of the North America trade secrets practice at Baker McKenzie in Palo Alto, Calif., has another view. He believes a CAIO can oversee both the use of AI and the innovation it brings as well as AI ethics.

"In the same way that all aspects of the financial function roll up to the chief financial officer, or operations roll up to the chief operating officer, ultimately, one C-suite executive can and should enjoy the ultimate oversight responsibility for AI," Newman said.

He said individual plaintiffs and class-action lawsuits are going to allege bad faith and discriminatory causes of action like disparate impact, discrimination and pay equity. When the company has to formulate its defenses, it has to understand what AI it uses, what it does and who is responsible for it.

"If they don't have a CAIO to help them understand why they made the decisions they made, they are likely going to have a higher risk of liability, higher settlement and higher payout," Newman said.

He added that he foresees a wave of AI-related lawsuits beginning in recruiting, hiring and promotion, where the technology is increasingly being used. If companies using AI in these areas don't have a CAIO, he said, they won't be prepared for the legal challenges ahead.

"Companies are going to be scrambling around spending internal time and external resources on lawyers and experts trying to figure out exactly what it is they are doing, versus proactively having the oversight they need to address these questions," he said. CAIOs should report to the CEO and/or the board and, among other tasks, should understand and approve all third-party vendors that sell AI solutions—especially those that offer technology solutions for recruitment and hiring, Newman said.

"Where appropriate, CAIOs should also oversee, help prepare and approve commercial contracts for AI," he said. "Special care is warranted where a third party presents a contract for AI that purports to disclaim all liabilities and where technology vendors offering AI-based recruitment solutions promise a proprietary algorithm they represent as nondiscriminatory but refuse to disclose it and refuse to indemnify the corporation. If the company using that AI is later sued, that's a problem," Newman said.

CAIOs overseeing algorithm-based recruiting and hiring tools need to understand that there is negotiating leverage in the front end of commercial contracts with third-party AI providers and they should be ready to deal with these issues, he said.

"As part of the negotiation, CAIOs should make clear that the company will not use the product unless the vendor can demonstrate that it has been effectively tested, and the vendor agrees to at least partial, if not total, indemnification of the company if sued over use of the AI product," Newman added.

Beena Ammanath, AI managing director at Deloitte Consulting, said there needs to be a closer connection between HR professionals and AI teams within an organization, as companies increasingly use machine learning, a popular branch of AI, to teach systems to analyze data, identify hidden patterns, make classifications and predict future outcomes.

"As companies mature in their AI journey, there may be a need for a chief artificial intelligence resource officer [CAIRO]," she said. "Once the algorithm is operationalized, that machine learning system is still learning and evolving just like a human employee does."

She added that machine-learning algorithms will need training, performance checks and performance reviews. If the system is not performing well, it may need a performance improvement plan.

Ammanath also said CAIROs will have to possess not only AI technical capabilities but also will have to know how to utilize the technology to bring value to the company. This could mean using AI to generate revenues, cut costs and improve internal business processes as well as to implement safeguards to protect them from harmful AI-based decisions. 

"For HR professionals who need to justify adding a CAIRO, they should drive the conversation with their leaders by focusing on the need to build accountability and mitigate risks. These are persuasive arguments that can help company executives understand the importance of creating the CAIRO position in the foreseeable future," Ammanath said. 

Nicole Lewis is a freelance journalist based in Miami. She covers business, technology and public policy.

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