How AI is transforming public and nonprofit governance from reactive to proactive

More about the podcast

Nonie Dalton is Vice President of Product Management and Phil Lim is Director of Product Management at Diligent. Together, they bring deep expertise in how mission-driven organizations like nonprofits, school boards and local governments can harness emerging technologies such as AI while keeping ethical governance at the core of their mission.

Nonie and Phil share their perspectives on how AI is transforming governance from a reactive function to a proactive, insights-driven practice. We explore the opportunities AI presents for efficiency, transparency and impact measurement, while also addressing the ethical challenges around accountability, bias and data security.

Listen in as we find out how Diligent is building cool AI tools with privacy and control in mind, and how features like Smart Prep, AI Search and risk management tools are helping boards make better decisions with less effort. From community engagement to multilingual access, they share exciting developments that are shaping the future of governance for mission-driven boards.

Stick around to the end to hear their excellent advice for how boards can future-proof their governance and why human judgment remains essential.

Resources for school boards on AI and technology

• The 3 E's of future-ready governance
• Smarter boards start here: A guide for public sector governance leaders

Resources for nonprofit boards on AI and technology

• The 3 E's of future-ready governance
• Smarter boards start here: A guide for governance leaders

Transcript of interview with Nonie Dalton and Phil Lim

Jill Holtz: Hi everyone, today I am joined by not one but two experts from Diligent. have Nonie Dalton who's Vice President of Product Management and I'd also like to welcome Phil Lim who's a Director of Product Management both at Diligent. So I'm going to talk to them today about how mission-driven organisations such as non-profits, school boards, local governments can navigate new technology that's coming downstream, AI etc and how they can drive innovation but also while ensuring that ethical effect of governance remains at the heart of mission impact. So Nonie and Phil, welcome to the podcast.

Phil Lim: Awesome, great to be here, Jill.

Nonie Dalton: Yeah, great to be here. Thanks, Jill.

How is governance evolving for mission-driven organizations with technology and AI?

Jill Holtz: So to kick us off today, I want to start with this question. How do you see governance evolving in nonprofit and public sector organizations as technology and AI becomes more deeply embedded in daily operations? So can I start with you, Nonie?

Nonie Dalton: Yeah, for sure. So I think ultimately, as we look at how AI is transforming governance from one of the biggest things in general trends that we see across all governance operations is moving from moving or helping governance, anyone who works within governance, really moving from a reactive function to being really proactive and insights driven practice. So what AI is really enabling is getting data to people and information faster for better decision making, being able to pull out trends a lot easier unless we're relying on data that has been prepared and potentially two, three, four months out of date by the time it actually comes up to them. Now, as we look and dive into the nonprofit and the public sector, one of the things that we start to see in the public sector area where compliance and transparency, especially around transparency is so key. AI is really for public sector organization is helping to enable that real-time data-driven decision-making, helping to make it transparent to their citizens and helping boards that come in through cycles that are being elected don't always have a lot of background information, being able to pull those insights up to them and to their fingertips a lot more quickly. And as we go into the nonprofit space where of course a lot of organizations are working on fundraising grants, all of that stuff, being able to risks and insight risk insights into their budgeting processes, their financial processes, all of that sort of stuff, looking at how their cash flows are working. Similar can be said for public sector but really driving better, faster decision-making and efficiency across both these types of organizations where at the end of the day, everybody's resource constraint and budget constraint in these environments, helping teams do more with less.

Jill Holtz: And what's your perspective Phil?

Phil Lim: Well, look, the mission driven and government organizations are being really, really asked to be more efficient. We are, there's not more people coming to help with accomplishing the tasks and the goals and the outcomes that our population demands. The entire demographic shift even is a challenge. And without the help of AI being able to help with some of these cognitive tasks, we're just not going to be able to have the same outcomes in the future as we do today. So I really do see the assistance of artificial intelligence helping the humans that are operating these organizations be just more efficient so that we can maintain these levels and improve our levels of service to the population and the public.

What ethical challenges do leaders need to think about as they integrate AI into governance?

Jill Holtz: So that's really interesting perspective from you both in terms of efficiency, going from being reactive to more proactive, helping kind of do more with less, which I think is constraints that both nonprofit and public sector both face. But obviously people have concerns about AI. So my second question to you both is what are the most significant opportunities, but also ethical challenges that leaders need to think about as they integrate AI into their governance? How can organizations balance innovation with responsibility? So Phil, I might get you to answer that one first.

Phil Lim: Yeah, no, great question. Look, to double click on what I was just saying, you know, AI as an opportunity, it's like nearly all tools. It's a force multiplier. So for example, if you're a diligent board member of a mission driven organization, you can leverage AI to. Diligize or review or consume or digest more information and just brought provide that much better governance. You're going to be way more efficient and effective, but if you're a lazy board member, you can leverage AI to be 10 times lazier as well. So fundamentally, the risk with AI is that inherently it has no accountability. So AI, self-driving car, if it hits someone, is it the car's fault? No, it's not the car's fault. It's you, the driver, the human that's sitting in that seat. Only humans have that accountability. So...

When an organization, think about similarly, if you're an organizational leader and you're making a mistake or an error, you can be fired. You can be let go. But if an AI makes a similar mistake, you can't just shut it off. can't turn it, how do you fire an AI? You can move on to a different solution or a tool, but ultimately when they make small errors, you can't give it that kind of feedback and corrective action. And so it's really, really fundamental, this concept of accountability and the lack thereof with AI.

Nonie Dalton: Maybe just continuing on from what Phil was saying, I like to think of it as AI isn't replacing the governance, is AI augmented governance, where that human judgment still needs to be there and come into play. And so it helps to get to the point where that decision making, those using that rationale, the logic, the years of history that people that are sitting on boards come to bring with them and their knowledge of the industry to help make, the end of the day, they are responsible for the decisions that they make. And so it's really bringing in that element of it and being mindful of that. Don't let it just, there is bias in AI and there that they need to watch out for. If the data feeding into it isn't accurate or is missing pieces, AI is only as good as what it comes in. It still requires that level of human judgment that is coming in. So if you have someone who's lazy and is not reading through their insights and not reading through all of the pieces or asking questions, what it is helping, we all find it easier to talk to people to brainstorm around ideas.

AI helps us get us there faster. Like what are the things that we should be looking at? What are the risks that we should be aware of and have it be looking into? So it helps to refine and get to those meteor topics, I think a lot faster, a lot easier for our boards. The other thing to keep in mind as well as we think about how these organizations are using AI, obviously in a governance perspective we have in nonprofits, a lot of really confidential financial data. You might be working in a healthcare organization.

In public sector, you have a lot of public transparency. Everything is going out to the public, all of your meeting minutes, but just really recognizing, maintaining, making sure that your organization is practicing best practices when it comes to maintaining the security of your data. Are you using tools that are secure and not possibly publishing things that shouldn't go out, like student records or something to the wider web, and making sure that it's within your own standards and having the right policies in place around that and the right security guidelines for all of your teams, because it doesn't take, all it takes is someone not thinking about that to put data somewhere where they shouldn't have. Those are some of the bigger ethical concerns as well when it comes to dealing with the types of data organizations are working with.

How is AI built into Diligent products for mission-driven organizations?

Jill Holtz: At the end of the day, particularly in public sector, but even in nonprofit, that one of the roles of the boards is to set the policy for the organization. And you touched on that. But one of the nice things I think about both Diligent Community and BoardEffect, obviously we're passionate, we sell those software products to mission driven organizations. What you can say with confidence is that the AI parts of those tools are ring fenced. You're not going out to a big ChatGPT with your sensitive board business, are you? I'd just love to hear a little bit from both of you because you're obviously immersed in product development. Talk to me about that side because I think that's important to these mission driven organizations.

Phil Lim: Yeah, absolutely. People are always concerned, well, what happens if the data that I put into an AI trains it and all of that? So we've taken a lot of time, energy, and effort here at Diligent to research the most secure way to be able to leverage AI. So when you mentioned ring fence, I'll kind of double click as to what that actually means. When Diligent AI runs, it runs in a computing environment that is completely isolated from any AI model provider. What I mean by an AI model provider are the open AIs, the Microsofts, the Anthropics, the ones that are actually building the AI models or the AI brains that go into these large language models. And because it's operating in an environment that's separate from those AI model providers, and we have the agreements and the.= due diligence in place to ensure that that data is not being shared with these AI model providers and that the data is not being used for training, we can provide a much deeper level of assurance that the data that you're sharing with diligent and trusting us with is not being used to then ultimately train an AI model and then at some point in that future, that AI model being able to respond to questions that might leak confidential information.

How are AI and digital technologies going to transform boards?

Jill Holtz: Excellent. So I want to kind of think ahead now, where do you think the AI and digital technologies are going to have the greatest transformative impact on how boards and leaders oversee, support and direct? I mean, I know you've touched on some of this already, but what are you excited about, Noni?

Nonie Dalton: I think there's a lot to be excited about as we look forward to how it's going to impact organizations. I shared sort of that high level of really that forward looking strategy, trend analysis, things that you can do. But as we think about like mission driven organizations, their ultimate goal is these are organizations that are working towards achieving a specific mission. They have a goal. So measuring the impact. Especially when you get into nonprofits, how you measure the impact of what your organization is doing is one of the most challenging things. And going through that data, analyzing that data and being able to make those relationships is actually quite challenging. Did the money that we received from this grant achieve what we wanted to do? And you might have survey responses that are coming in. You might have all sorts of things that are coming in. So being able to relate back to that and in...

I would say in an efficient manager and really pull out some of those broader program evaluation or impact measurement pieces is really helping, will help organizations get to a point where they can really have that data-driven aspect, which was challenging before. The same goes for how you're managing, fundraising analytics and those sorts of things, predictive and getting into some of the things like predictive insights to guide like mission priorities, for example.

It'll be interesting in the public sector as well. There are some things that really excite me in the public sector space as well. Specifically, as we get into looking at, think one of the hardest things in the public sector is you are operating often in a silo. You've got your local government going on. What are the bigger trends that are happening across organizations? There's all this public data in there. Are you paying more for police cars than the county that is sitting next to you, for example, when you're making decisions?

Jill Holtz: Yeah, being able to benchmark yourself.

Nonie Dalton: You know, know a lot of our customers almost in every meeting, they are talking about they're approving contracts, but at their fingertips isn't necessarily the data. What are the last 10 contracts that we approved for this vendor? Did they go well? Was there change orders? All of that sort of stuff. So getting into those things. when they make, they're being asked to approve a contract at a city council level, at a school board level, they can have those insights so they have an informed.

They can ask the right questions or be informed about those decisions. So really supporting that, making sure they have the right level of oversight. And then as well, as you get into things like, I think one of the areas that has been challenging in both nonprofits and local government is around policy modeling and really relating that back to compliance guidelines, making sure that they're not out of compliance. And then as well, some of the risk forecasting for a mission-driven organization for specific strategic goals that they have. If they're not talking about those strategic goals and addressing those in each of the different meetings and relating that stuff back, they're not going to achieve those missions or goals. And AI can help and support to keep you on track and highlight different risks that they might have emerging as it goes through all those meeting materials as they talk on a regular basis.

There's so many things I think that can happen and that can be and that is possible with AI, those things that we always thought too hard to do. So it is exciting to see everything from those like little efficiency gains to some of those bigger, bigger insights, those things happening over the next couple of years for both types of organizations.

Jill Holtz: And Phil, what are you thrilled to see coming down the tracks?

Phil Lim: Well, everything that Noni said was so exciting. I really like the idea of measuring impact better. Look, we all have opinions of how a dollar spent in this area or, you know, spending time in this area might have an impact. And when we go and execute, you don't necessarily spend the time to follow up because it's so darn subjective and difficult and yeah, just not easy. So having AI that can help be a scalable, subjective assistant, that's just huge. And the other thing that I'm really excited about is the ability to involve participation at scale, right? So it's so difficult to bring together voices from across a community into participating. Leveraging AI as a way to scale out participation is something that I personally am very, very keen on seeing occur more and more often as these technologies emerge and get better.

Jill Holtz: I love that and to the point of, you know, transparency and building trust, that's like a win-win, isn't it? You get more of your participation, you get your community involved, that builds more trust. As you said, Noni, the fact that you're showing how you made those decisions and that's very transparent. mean, that's one the things we really love in particular about Diligent Community is really allowing the community to see and therefore trust.

Nonie Dalton: Yeah, and that's a huge part of Community. even like as we start to, I think there's a huge opportunity, even there's a whole community engagement part of Community where you can have citizens write in, request to speak in meetings, you can take all of their feedback that they, you might be preparing your agenda with whoever is chairing your meeting, might be your city mayor, depending on the size of the community or your city manager or your school board superintendent as you prepare for those meetings, even just looking like, what's the feedback we're getting from parents? What are hot topics that we need to have in place? So these are all things that AI will help to enable as we go forward. And I think it's so exciting.

Future developments at Diligent

Jill Holtz: So let's just talk a little bit more about Diligent because again, you're kind of immersed in what's coming down the tracks at Diligent. Talk to me about what you've got kind of in your brains, what's coming when it comes to that intersection of governance, technology and AI. What's coming down the tracks that people can start to look forward to? I know we're talking, you know, in a year or so, but I always love to give people sneak previews as well. I think it gets people excited. Nonie, let me kick off with you on that one.

Nonie Dalton: Yeah, so sneak peek into terms of some of the things that are coming down the line on the nonprofit side, definitely working on better supporting and enable board members. so making it, we've got as few things that we've already introduced in the product, the ability to summarize a lot of the board materials, helping them prep and review before a meeting very shortly in the next, I would say within the next four weeks or so.

For meeting preparation, Smart Prep is what we call it as part of our AI GovernAI piece, which is really going to help those board members as they, questions they should be asking, providing insights, things that they should be looking at as part of that. So excited to have that as well as better enabling. We talked a lot about how AI enables people to get the right data at their fingertips at the right time. So empowering our tools with AI search to better support that so they can find any piece of relevant material as they need it and then moving into more of that natural language question and answer that they would look for and then being able to dive into the exact data. So no more like I need to find the October board materials and then, or the budget and getting 50,000 different attachments and trying to find the one that they actually wanted to find.

In the public sector side of things in Community, really excited as we start to embed AI generated transcripts that are side by side with the minutes. And we're going to be continuing to enhance along there, talking about some of the search capabilities as well that I mentioned for our nonprofit BoardEffect product, also coming into Community and really enabling as well what we call our public search. So the ability to look across all of the public sites and be able to pull information. If you wanna see how other organizations are dealing with new policies across your state or across your county and use that for like, okay, what's working? What have they changed it to? How does that compare to what we're doing? Everyone's trying to comply with the same regulations, bringing in those capabilities. And then as we get into next year, a lot of efficiency tools as well to help our admins, help policy makers, help our board members, just make all those connections that they need to, whether that's finding a relevant or related policy or being able to quickly get their minutes from their agenda transformed into the minutes format and helping to generate that. So a lot less time just manually typing things out. Yeah, multilingual translations is another hot topic for us as well.

Jill Holtz: I think a lot of secretaries and clerks will be happy to hear that's coming.

Nonie Dalton: As well, it's something that's hard to do on the fly. And as we get into, we mentioned before, transparency is key. And if you're a community, if their first language is not English, and you need to make sure that parents or community members are also getting the information at their fingertips, then enabling that as well.

Jill Holtz: I love that. And Phil, you know, as people are migrating on to what we call our Diligent One Platform, we've got a whole load of other AI tools that are going to be available effectively for those boards to tap into, you know, like Risk Essentials. We talked about risks a minute ago. Talk to us about some of that coming.

Phil Lim (21:25.803)

Yeah, I would really, there's so much on the platform, but I would really focus on two things. one is an AI enabled risk management capability. And number two as an AI enabled data analytics capability. So first on the risk management aspect, boards and, governing bodies over mission driven organizations are being asked more and more to be put on a risk management hat more so than just happy and governance hat being able to understand what uncertainties are in front of them. So having a robust risk management program, look, organizations just don't know where to start with that. And so we have, you know, essentially starter kits for risk management built into our platform with the best practices in mind to be able to load in your population of risks, have it discover new risks for you with the power of AI, and then manage those risks and be able to track and remediate them.

The other is around data analytics. So, we talked a lot about measurement of success, being able to load in any amount of data into our diligence, ACL AI studio. once you've uploaded that data and it might be in four different files, five different files, 20 different files, the AI will look through all that data, pick out the trends and patterns and, and give you some options for how you might want to analyze that data. And then you just have a chat conversation with the AI tool and ultimately you end up with the insights and outcomes that might take you many weeks of Excel V lookups and cross lookups and a bunch of challenge to really sort out. And this really enables that data analytics capability to be handled a lot more efficiently and effectively. So we're really excited about those two pieces.

Advice for leaders on future-proofing governance

Jill Holtz: I love that and also as part of the Platform, people can get access to certifications and education that helps to upscale because often for, probably on the non-profit side, it's volunteers and even when you're publicly elected, you're still volunteering your time for that school district or local government, aren't you? So to be able to upscale the board and support board development and training in key areas is something I think is great as well. So conscious of time and I know you're both really busy so I just want to kind of finish off with a quickfire question so again to both of you in 30 seconds or less what's one piece of advice you'd give to mission-driven leaders looking to future-proof their governance so Phil let's get your advice first

Phil Lim: AI can seem complicated. A lot of people react to AI in a very, very diverse way. So I would say always when you're communicating about AI, use simple language, use simple principles, use very straightforward language. The concept of, you know, we have a principle here. You are, when you're using AI, you are, you the human are responsible for the outputs and outcomes of AI.

And just that one principle by itself encompasses so much that that covers so much and people can instantly understand what that means. So I would say as you're building out your AI governance programs, think about that.

Jill Holtz: Great, thank you and Noni, what's your advice?

Nonie Dalton: 100% agree with Phil. I would add to that, especially as I know for many of our customers, they're early in their adoption curve. Part of it is to not be afraid of it. Move forward with, you can start small. And one of the best things about our application as well is we put the control into what they use in their hands. There's no secret AI ever happening within the platform. can choose which features to turn on and off depending on their comfort level. And then as well, make it visible that, hey, if somebody needs exactly like Phil was saying, at the end of the day, the human judgment is so important, we make sure that it's clear that if a summary is coming from AI, it is very transparent to the user. So educating them as they use those tools so that they know when it's coming from AI so they can use their human judgment as part of the decision-making process.

Jill Holtz: I love that never forget the human element. So thank you Phil and Noni I really appreciate you both taking the time to talk to me today sharing your perspective and advice it's been a real pleasure to talk to you both today. And if you're interested in getting further advice on using technology and AI to support efficiency, effectiveness and engagement for your board then check out our newest guides available to download for free. We also have a fantastic resource What 100 plus administrators told us about technology and governance. So stop by our website and I'll put links for both of those in the show notes and until next time keep leading with purpose.