The Latest Wave of AI Challenges for the Human Capital Committee

Is your organization effectively addressing the impact AI is having on its workforce?

by Michael W. Peregrine, Executive Fellow

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The broad impact of AI on the workforce is creating a new wave of governance challenges for the board’s Human Capital Committee – well above and beyond those historically addressed by the Committee in its oversight of employee supervision and support. These new challenges and the questions they present to include the following

• New studies suggest that AI tools may be burdening employees as much as they are driving productivity gains. Should the company monitor whether management’s assumptions about AI-prompted efficiency gains are being met?

• The “AI is Coming for My Job” perspective is having a corrosive impact on worker loyalty and workforce culture. Is the company adopting measures intended to enhance worker retention and organizational climate?

• McKinsey’s new AI study estimates that automation will require unprecedented levels of workforce transition. What is the organization’s commitment to employee reskilling, and to creating pathways to new capabilities?

• New programs are emerging to reward employees who demonstrate the human skills necessary to complement AI use. Is the organization sensitive to the promotion of adaptability, innovation and judgment?

• AI and other forms of automation threaten to erode the dignity of labor at all levels of the workforce. Are employees provided with opportunities for growth, recognition, relationships, and purpose through their work?

• The extent to which AI agents are placed on organizational charts, similar to human employees, requires special management efforts. What are the associated supervisory, security and operational risk consequences?

• New costs arise from necessary human quality review of AI output, and the skills needed to conduct that review. Are systems in place to identify the presence, and efficiency impact, of a “verification tax?”

• AI-assisted surveillance tools are increasingly being applied to track employee behavior and monitor productivity. Are the compliance, privacy and workforce culture implications being monitored by leadership?

• AI is playing an increasingly important role in employee recruitment, including both resume review and AI agent-conducted interviews. How is this impacting employer and candidate decision-making and confidence?

• Older, experienced employees are increasingly forced into retirement due to limited access to training on AI workplace technologies. Is the company taking steps to retain the services of this valued class of workers?

• Technology-driven developments are becoming an awkward fit for traditional HR/HC committee agendas. Is it time to consider an expanded committee charter and an adjustment to committee composition?

Thoughtful board consideration of these and similar new concerns will help confirm its “good faith” responsiveness to the rapidly evolving environment.