Responsible AI: How CEOs can reduce liability risks
What managers need to know now in order to use AI responsibly, legally and ethically in their companies – including practical recommendations.
Artificial intelligence (AI) has become an indispensable tool for companies. It increases efficiency, enables innovative business models and opens up new competitive advantages. However, the use of AI also poses challenges. Managers, in particular, are responsible for not only strategically shaping the use of this technology, but also for ensuring that it is legally and ethically sound.
This article highlights the key risks associated with AI and presents concrete measures to mitigate these risks and at the same time strengthen the trust of customers, employees and partners.
The risks posed by non-transparent AI systems
One of the biggest problems with many AI applications is their lack of transparency. Systems that are based on complex algorithms often act like black boxes with decision-making processes that are difficult to understand – even for experts. This lack of transparency poses significant risks in many respects:
Operational risks
Non-transparent systems could make assessments that do not always align with the company’s objectives or are even counter-productive. One example of this is automated lending: If algorithms make discriminatory or incorrect decisions, this can result not only in economic damage, but also legal consequences. Such erroneous decisions also impair process efficiency and lead to unnecessary costs.
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Compliance and legal risks
The legal requirements for using AI are becoming increasingly strict. Regulations such as the GDPR (General Data Protection Regulation) and the EU AI Act set clear standards for the use of personal data and the transparency of algorithms. Since 2023, the Revised Data Protection Act (revDSG) has acted as the core foundation for all companies in Switzerland that process personal data. EU regulations, such as the GDPR and AI Act, only apply additionally to Swiss companies if they offer services or goods directly to individuals in the EU or monitor the behaviour of EU users. Violations of these regulations result in heavy fines and make companies legally vulnerable. There is also a risk of product liability: If an AI system causes damage – be it through incorrect decisions or discrimination – the company is liable for this. CEOs therefore have an obligation to ensure that their AI solutions satisfy these criteria.
Reputational risks
Trust is one of the most valuable resources of any company. The use of AI without sufficient transparency quickly undermines this trust. If it becomes known that a system discriminates or violates data protection guidelines, not only does the image of the company suffer – customer relationships and talent retention are also jeopardised. Negative headlines in the media or criticism by stakeholders amplify this effect and damage reputation in the long term.
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Legal and ethical responsibility of company management
Managers are not only faced with the task of using AI strategically, but also of allaying the legal and moral concerns of their stakeholders.
Legal framework
Legislation in the field of artificial intelligence continues to develop dynamically. The AI Act defines strict requirements concerning the transparency and security of AI systems, while the Cyber Resilience Act (CRA) focuses on the robustness and security of digital products. Violations of these regulations not only result in financial penalties – they can also raise personal liability issues for management. To prevent this, it is essential for companies to consistently adapt their systems to applicable standards and have them regularly audited.
Ethical responsibility
Alongside legal requirements, ethics also plays a key role in the use of AI. Transparency and traceability are not just regulatory requirements, but an expression of responsible corporate governance. Systems must operate fairly and without discrimination – this strengthens the trust of customers and employees and positions the company as a credible player in the market environment. Ethical standards also offer an opportunity: They create the basis for sustainable business relationships and promote a positive perception of the brand.
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Measures for reducing liability risks
In order to integrate AI responsibly into the company, managers should introduce a structured programme to overcome any reservations among both their own staff and their customers.
1. Establish clear governance structures
Solid governance forms the basis for reliable use of artificial intelligence. Responsibilities have to be defined. Clarify the following questions in advance: Who will be responsible for development and who will oversee implementation and operation? By clearly assigning roles, you ensure that all relevant aspects are taken into account – from conception and application to regular updates.
Our tip: Our free AI checklist provides you with a guide to the structured implementation of AI in your company. Take advantage of the new technology and create a solid foundation for digital transformation.
2. Encourage transparent communication
Open dialogue builds trust among employees, customers and partners. Internally, you should inform your employees about the use of AI – including the opportunities and potential risks. Externally, it is important to explain to your customers in a transparent manner how the systems work and what data will be processed.
Our recommendation: Deepen your knowledge continually through practical AI webinars. This will keep you up to date and give you a competitive edge that can make all the difference.
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3. Perform monitoring and audits
Systematic controls will allow you to ensure that your systems are operating transparently and comply with the predefined standards. You can identify vulnerabilities early on and resolve them by conducting internal audits or external reviews. Careful documentation of all findings serves as proof for regulatory authorities and in the event of legal disputes.
4. Raise awareness among managers
CEOs need comprehensive knowledge of the legal and ethical implications of AI applications. Regular training courses help you to assess risks better and make more informed decisions.
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5. Optimise use in everyday business life
AI systems like ChatGPT and others offer enormous potential for everyday working life – provided they are integrated in a meaningful way. By providing targeted training for your teams, you can maximise the benefits of such technologies.
Practical support from the experts: Our AI Academy for everyday business teaches concrete strategies for the effective use of modern tools and creates a common understanding of the most important terms in relation to AI.
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Establishing AI responsibly as a competitive advantage
The conscientious use of artificial intelligence is not just a nice-to-have. It is a necessity for any company with long-term ambitions. CEOs play a key role in this: Through transparent processes, clear governance structures and regular monitoring, they not only ensure the success of their AI strategy, but also strengthen the trust of all stakeholders.
