Assessing ROI of AI ethics and governance initiatives

Investing in AI ethics has the potential to create quantifiable value.

Generative AI is revolutionizing industries, but its dizzying ascendance has also raised significant ethical concerns. Balancing the potential benefits with ethical and regulatory implications is crucial.

But it’s not easy. In unpublished IBM Institute for Business Value (IBM IBV) research, 80% of business leaders see AI explainability, ethics, bias, or trust as a major roadblock to generative AI adoption. And half say their organization lacks the governance and structures needed to manage generative AI’s ethical challenges.

In the face of this uncertainty and risk, many CEOs are hitting pause. More than half (56%) are delaying major investments in generative AI until they have clarity on AI standards and regulations, and 72% of executives say their organizations will actually forgo generative AI benefits due to ethical concerns.
 

Yet there is a path forward—if executives broaden their outlooks and view AI ethics as an opportunity. Even better: ongoing research suggests that investing in AI ethics has the potential to create quantifiable benefits.

In order to unlock this potential, organizations need to embrace a new perspective as they evaluate the ROI of AI ethics investments.

In part one of this report, we identify three key types of ROI that apply to AI ethics—in other words, a holistic AI ethics framework. In part two and part three, we explore two distinct but valuable ways to justify AI ethics investments right now. (We plan to build on this work by conducting additional research in 2025 that explores quantification in greater depth.) Finally, we offer an action guide for bringing the holistic AI ethics framework to life inside the organization.

We also include stories from five executives on the front lines of AI ethics, as part of an ongoing collaborative project among the IBM IBV, the Notre Dame—IBM Tech Ethics Lab, the IBM AI Ethics Board, and the IBM Office of Privacy and Responsible Technology.

Exploring a holistic AI ethics framework

AI ethics and governance investments can span broadly across the enterprise, from an AI ethics board to an ethics-by-design methodology, from an integrated governance program to training programs covering AI ethics and governance, among many other endeavors.

So how do organizations begin measuring the impact of such initiatives? We developed a holistic AI ethics framework to meet this need, validating it through an extensive series of conversations with over 30 organizations. This approach can help organizations understand the value of their AI ethics and governance investments.

Traditionally, investments are justified by calculating ROI in financial terms alone. AI ethics investments are more challenging to evaluate, providing both tangible and intangible benefits as well as helping build longer-term capabilities. “There are always questions around ROI and business cases,” observes a senior AI and technology leader at Starbucks, “and the answers can be hard to give.”
 

“Our work has to not just contribute to the mission of the organization—but also has to contribute to the profit margin of the organization,” notes Reggie Townsend, Director and VP of the Data Ethics Practice at SAS. “Otherwise, it comes across as a charity, and charity doesn’t get funded for very long.”

 
The HRAIE Framework identifies three types of ROI that organizations should consider with AI ethics investments. 

Source: “The Return on Investment in AI Ethics: A Holistic Framework.” Proceedings of the 57th Annual HICSS Conference on Systems Sciences. January 2024.

The holistic AI ethics framework depicted above describes three paths to understanding the impact of investments in AI ethics with regards to stakeholders: the direct path through economic return, and indirect paths through capabilities and reputation. This framework encompasses and describes the relationships, stakeholders, and potential returns that exist when organizations make investments in AI ethics.
 

At a high level, how might this holistic AI ethics approach work in practice?

Consider the investment in an AI Ethics Board infrastructure and staff. This investment helps prevent regulatory fines (tangible impact); increases client trust, partner endorsements, and business opportunities (intangible impact); and helps enable the development of management system tooling that improves automated documentation and data management (capabilities). The holistic AI ethics framework illustrates how AI ethics is interwoven throughout an organization, both in terms of practices and outcomes.

Download the report to learn about a new framework for evaluating your AI ethics and governance investments—and how to integrate this approach throughout your organization.