"In this paper we discuss the AI standards being established and review peer practice at major SWFs. We showcase in practice how the board can lead the process and ask the right question, both internally and to the external stewards of the asset entrusted under their oversight.
The Institute of Sovereign Investors offers its third paper with an AI focus and will continue to monitor developments of the emerging best practice and peer application.
Conclusion
There are many opportunities and risks that come with the innovation of AI and its adoption within a best-practice and institutionally resilient sovereign investment organization (or any other organization).
What good looks like will always depend on the specific organization, but we would advocate that adoption of best practices starts and ends with:
1) Understanding global standards and how to apply these. Seek expertise and verification where this serves the organization, and empower staff to excel and learn, as AI is a tool to augment processes and make decision-making better and backed by data.
2) Study peer practices and case studies from around the globe. Much comes from learning from others and sharing innovative ideas and knowledge with peers. Seek out global institutions that are built for this purpose.
3) Subject the organization to due diligence and learn how to ask the right questions – both internally and externally. Use a framework and keep track by scoring responses, identifying gaps and ensuring progress by bringing this exercise to the top of the organization.
4) Finally, find and address the gaps in annual work programs and continued learning to strive for best practice and leadership amongst peers.
The Institute of Sovereign Investors draws on the global experience of more than 90 high-level experts and leaders, who have led SWFs and central banks around the world. We partner with the industry’s most respected and experienced practitioners and academics, including in AI, and stand ready to help organizations adopt and implement best practices around the world.
To enhance transparency, the Institute will also make the AIMI research on sovereign investors and pension funds available on its website as well.