New York Artificial Intelligence Laws: 3 Takeaways for Boards

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While the use of artificial intelligence for board meetings provides efficiency and cost savings, important issues must be considered. New York laws have been adapting to the exponential trajectory of AI technology so these issues are not ignored or easily dismissed.

Compliance with New York’s AI laws and regulations is important for 4 core reasons, each directly tied to fiduciary responsibilities, legal exposure, brand trust, and future-proofing the business or organization. These reasons include:

Legal risk mitigation: Failing to comply with AI laws can result in fines and penalties, civil lawsuits, and regulatory enforcement by state or local agencies.
Board-level fiduciary duty: Boards have a duty of care and duty of oversight under corporate governance law. This includes ensuring that management implements various AI compliance programs, such as monitoring legal and ethical risks and responding proactively to new regulatory environments.
Operational continuity and public contracts: New York AI law mandates that public agencies only use AI-compliant vendors. That is, if a company sells AI tools or services to government agencies, noncompliance could result in a lost contract.
Reputation and stakeholder trust: Boards are increasingly judged by investors, employees, and customers on how they deploy and manage new tech like AI.

AI legislation is enacted to protect businesses and consumers alike by mitigating artificial intelligence security risks. Boards must be mindful of the following AI laws.

New York Artificial Intelligence Laws

These laws focus on businesses and New York government state agencies that use automated decision-making systems (ADMs) or the types of artificial intelligence tools that interact with users.

1. NYC Local Law 144 – Bias Audits for Employment Tools

This New York City law prohibits the use of Automated Employment Decision Tools (AEDT) if they have not undergone a bias audit within one year of the use of the tool. Once a bias audit is conducted, information about the audit must be made available to the public. In addition, notices must be provided to employees or job candidates.

Board Takeaway: Ensure human resources and legal departments oversee AEDT compliance, public disclosure, and documentation.

2. New York State “LOADinG” Act

The Legislative Oversight of Automated Decision-Making in Government (LOADinG) Act also targets the use of automated decision-making systems (ADMs) and AI, but with a focus on New York state agencies. This law ensures that state agencies’ systems, especially if they have influence on individual rights or access to public benefits, are developed and deployed with transparency, accountability, and fairness.

Board Takeaway: Vendors working with state agencies must meet these requirements and maintain audit readiness.

3. New York A3008 – Personalized Algorithmic Pricing and AI Companions

This law focuses on businesses that use algorithms to tailor prices for products and services according to the consumer’s personal data. Businesses that use this strategy are required by law to disclose this to consumers.

Organizations that deploy AI companions are required to implement safety measures to prevent the AI from offering harmful financial, legal, medical, or physical advice. They must also disclose to users that they are interacting with a computer program, not a human being.

Board Takeaway: Prepare to revise pricing models and chatbot disclaimers for compliance.

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Emerging Board-Level Responsibilities

While transitioning to AI technology streamlines business operations, it also adds new responsibilities to the board of directors’ workload to not only comply with the law but also ensure stakeholder trust. There are several board-level responsibilities that businesses and organizations must meet to improve their AI compliance posture.

They include:

Board Duty	Governance Action Required	Owner
AI strategy oversight	Ensure AI use aligns with company strategy, values, and risk appetite	Board chair, CEO
AI risk management	Oversee enterprise-wide AI risk assessment and controls	CRO
AI ethics and responsible use	Approve principles on ethical AI use; monitor fairness, transparency, and accountability	Chief ethics officer
Data governance and privacy	Review data quality, security, and privacy for AI training and deployment	CPO, CDO
Regulatory compliance	Monitor compliance with emerging AI laws	General compliance officer
Training	Ensure board directors receive ongoing education on AI technologies and risks	Lead independent director, corporate secretary

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OnBoard AI is designed to streamline board governance by offering a complete suite of AI-enabled tools that enhance every phase of the board meeting process. There are several benefits of using our software’s AI-backed features:

Improved efficiency and productivity: AI tools handle routine tasks, analyze data, and summarize information via AI-generated content, saving users time and allowing them to focus on priorities.
Data-driven insights: AI tools process and analyze vast amounts of data to provide insights and identify trends that may go unnoticed by human analysis.
Consistency and accuracy: AI tools ensure the information presented is accurate and consistent, reducing the risk of human error.
Quick access to information: AI tools can quickly retrieve relevant documents and data points, making information more accessible when needed.

OnBoard Powers Boards in New York

New York AI laws and regulations are meant to minimize risk, which in turn helps your business or organization thrive. Understanding and complying with AI laws and ethical concerns keeps your brand and reputation intact by protecting stakeholders.

The OnBoard platform has all the artificial intelligence tools for meetings your business needs in one package. In addition, the software solution prioritizes what matters most: security, compliance, and ease of use. OnBoard offers enterprise-grade security and never uses your data to train AI models.

Best of all, OnBoard’s generative AI system is intentionally designed for board governance, offering tools to streamline agenda creation, meeting minutes, and more.

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About The Author

Adam Wire: Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.