Stewardship in the algorithm age: why charity boards must lead on AI

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement


Stewardship in the algorithm age: why charity boards must lead on AI

Sponsored by

McCarthy Tétrault logo
Blocks featuring "AI", "governance", "privacy", etc on a boardroom table

Troy McEachren of McCarthy Tétrault explains why Canadian charity boards should treat AI governance as a core stewardship responsibility, despite an evolving regulatory landscape and the absence of federal legislation

The history of corporate governance is a cautionary tale of what happens when transformative innovation outpaces oversight. As noted in McCarthy Tétrault’s recent analyses of the Canadian ESG and sustainability landscape, we have seen how “innovation untethered from accountability” led to the collapse of giants such as Enron and the 2008 financial crisis. For the charitable sector, the stakes are arguably even higher.

While a corporation risks losing share value, a charity that does not properly manage its digital transformation risks losing the hard-earned trust of donors, beneficiaries, and the community. As AI begins to reshape how we manage data and deliver services, boards must recognise that AI integration is not merely a strategic option but a fundamental component of modern operations.

Integrating AI into charitable operations offers a powerful mechanism to amplify impact. AI governance is rapidly becoming the next great flashpoint for organisational responsibility because it touches on many aspects of a charity’s operations. AI can bridge gaps or inadvertently bake bias into beneficiary selection and resource allocation. The data centres powering these tools carry an ecological footprint.

From a governance perspective, the ‘black box’ nature of complex algorithms requires boards to ask difficult questions about transparency and fairness. If a charity uses AI to screen grant applications or target donors without proper oversight, it risks litigation, regulatory scrutiny, and an erosion of public confidence.

In Canada, the regulatory environment is in a state of flux. With the recent demise of Bill C-27 (the Digital Charter Implementation Act, 2022), which included the Artificial Intelligence and Data Act on the order paper, there is no federal legislation to regulate how high-impact AI systems must be managed.

This incomplete framework places the burden of responsibility squarely on the shoulders of the charity’s board. Rather than waiting for the government to mandate safeguards, proactive charity boards should look towards voluntary standards. By adopting rigorous internal policies that align with fairness and accountability, a charity’s board can demonstrate to its stakeholders that it is not just chasing a trend but is committed to the responsible and ethical management of the tools that define our era.

Ultimately, the question for a charity’s board is whether it views AI governance as a matter of technical choice or as a core obligation of stewardship. As AI becomes more systemic and consequential, the wait-and-see approach becomes a risk in itself. Stakeholders and donors are already beginning to demand the same level of transparency for AI as they do for financial reporting.

By integrating AI thoughtfully today, boards can ensure their organisations remain resilient, relevant, and, above all, trusted. The goal is to harness the efficiency of the machine while maintaining the heart and accountability of the mission.

more across site & shared bottom lb ros

More from across our site

As tax authorities embrace AI and governments weigh pillar two reforms, Latin America is developing a more connected and internationally focused tax agenda
Advisers with pre-existing corporation tax or self-assessment accounts must now register or risk enforcement action from HMRC
India's tax authorities are increasingly scrutinising the rationale behind cross-border structures
Sharmila Sanmugam's move from industry to WTS UK offers an early glimpse into how the fledgling firm hopes to compete with larger rivals
Historical claims involving KPMG Australia's tax practice have surfaced as the firm battles a separate parliamentary inquiry into its handling of whistleblowers
While AI is revolutionising tax work, it is also reshaping clients’ willingness to pay for advice and their perception of the value generated by tax advisers
From Dhruva Advisors to Svalner Atlas, Ryan is growing fast. Tom Shave discusses consolidation, competition, and tax’s private equity debate
Awards
ITR is delighted to reveal the shortlisted nominees for the Middle East Tax Awards
The UK has confirmed its approach to the OECD’s side-by-side deal, but US-parented groups may find pillar two compliance remains far from straightforward
Fragmented pillar two taxation and increased use of AI by tax authorities have left clients fearful of heightened disputes exposure
Gift this article