Marie Bafus and Wendy Grasso of Fenwick join the Boardroom Governance Podcast to discuss AI oversight, Caremark duties, mission-critical risk, board minutes, AI washing, disclosure, confidentiality, privilege, AI usage policies, and how boards can use AI responsibly.
(0:00) About the Boardroom Governance Summit (Aug 26-27, 2026)
(0:55) Intro
(2:44) About the podcast sponsor: The American College of Governance Counsel.
(3:30) Start of interview.
(4:16) Origin story Marie Bafus
(5:30) Origin story Wendy Grasso
(7:34) Diving into their article AI in the Boardroom: What Directors Need to Know Now
(4:14) Why AI Needs Board Oversight
(12:00) Caremark and Oversight Duties
(15:12) Mission-Critical Risk Cases. Reference to Marchand case (2019) and Boeing case (2021)
(19:18) Where AI Belongs in Governance (board level and board committees)
(21:28) Defining Mission-Critical AI
(24:45) Strategy, Capital Allocation, and Judgment
(29:50) Board Minutes as Litigation Evidence
(33:52) Private Companies, Same Duties
(38:35) AI Washing and Disclosure Risks
(43:10) How Boards (and Board Members) Can Use AI
(47:08) Hallucinations, Confidentiality, and Privilege. Reference to U.S. v Heppner case (2026)
(52:03) Building an AI Usage Policy
(53:36) Recording Boards with AI (note taking apps)
(57:05) Workforce Trust and Environmental Risk
(1:00:00) AI for Oversight Itself
(1:02:02) AI’s Impact on Legal Practice
Marie Bafus is a partner in Fenwick’s Securities Litigation Practice and Wendy Grasso is counsel in Fenwick’s Corporate Practice.