Using artificial intelligence in companies helps prevent scandals

Corporate governance, one of the pillars of ESG (acronym for environment, social and governance), returned to be one of the main media topics in 2023 after large companies were involved in scandals. With the launch of new technologies, such as artificial intelligence (AI), these problems tend to decrease, according to experts interviewed by Estadão.

They highlight that the use of artificial intelligence in corporate governance can be beneficial to strengthen transparency. Therefore, this association is already seen as a trend by companies.

“AI has the potential to be a powerful tool for preventing governance scandals. Algorithms can be trained to identify abnormal behavior or suspicious transactions that may indicate fraud or misconduct”, explains the executive director of C&S Projetos e Mercado, Bruno Siqueira.

He asserts that AI can serve as a tool to enhance corporate governance practices, improving operational efficiency, regulatory compliance and decision-making. With this, the biggest gain is the possibility of combating and detecting fraud.

Siqueira remembers that not even counselors are immune to their own biases. “The rationality of an AI framework can mitigate both the dysfunctional behaviors of counselors as individuals and group biases.”

Benefits in practice

In practical terms, Siqueira highlights that one of the biggest benefits is the possibility of automating routine compliance tasks, which not only increases the reliability of the reports generated, for example, but also makes the process faster and less bureaucratic.

“Artificial intelligence helps in decision making. It works as a curator for information”, explains Axur product manager, Rodrigo Alves, highlighting that the biggest advantage of AI in decision-making is selecting the most important contracts to be evaluated, for example, based on personalized criteria. for the company.

Other benefits, according to him, are: insights into areas or themes that should receive more attention from companies, the creation of document summaries – which, depending on the volume, could take a long time – or finding possible inconsistencies in contracts, for example.

Furthermore, technology can help with risk assessment, real-time monitoring of financial transactions and improving internal and external communications leading to more effective, transparent and accountable governance.

Siqueira states that another advantage is the detection of fraud through algorithms and providing deeper analysis for strategic decision making.

Caution is needed

The expert highlights that it is important to make it clear that artificial intelligence is a tool and must be part of a broader approach to good governance, including the use of other control systems.

Rodrigo Alves, from Axur, states that, although technology does the initial work in data curation, for example, it is important to have human work later.

He also highlights that the data to be processed must be personalized, with the addition of criteria that address the company’s needs. “The more generic it is, the riskier it is.”

The expert also highlights that the use of open models ends up being more risky and imprecise. Therefore, the tip is for companies to opt for specific domains on platforms such as ChatGPT or other artificial intelligence. “They are working better than the open ones, as you provide them with a more filtered and quality database than all the information available on the internet, for example”.

Bruno Siqueira also warns that AI is subject to failures, as it has limitations, which demonstrates the need for the AI ​​system used in governance to be regularly audited and updated, and for human beings to continue to be involved in the supervision process.

“Algorithms can be influenced by inaccurate or biased data, and may not be able to capture the entirety of a complex problem. This can lead to reports that are inaccurate or even misleading,” he says.

The President of the Smart Business Institute, Lorenzo Madrid, highlights that the use of AI in corporate governance continues to be a trend in the corporate market, in addition to process automation and the use of real-time technology systems.

For him, blockchain (a data chain that allows the sharing of goods and information on a secure and immutable basis) is also proving strong in the market, and is already starting to be used in so-called smart contracts.