AI Risks, Failures and Consequences — Corporate Governance

Why it matters for NETEVO

Bednarz and Bennett is the operational-failure companion to the directors'-duties academic anchor at §19. Where §19 establishes that AU director duties bind on AI governance in principle, this paper specifies what failure under those duties looks like in practice — risks, failure modes, and the downstream consequences they produce for AU corporates. Published in the Australian Journal of Corporate Law, it is the academic substrate the operational findings in ISO/IEC 38507 and the Three Lines of Defence literature need to sit on.

Failure-mode vocabulary that translates to APRA CPS 230. The risk-failure-consequence triad maps directly onto operational-risk language. Where the Three Lines of Defence material supplies the procedural anchor, Bednarz and Bennett supply the failure modes that the three lines exist to defend against. The pair becomes the natural academic citation for any CPS 230 or three-lines argument in the forthcoming CPS 230 executable-edge-controls insight.

A four-paper director-duties bundle reaches saturation. Together with the AICD/HTI Director's Guide and the §19 Brand academic paper, Bednarz and Bennett complete the bundle of peer-reviewed and practitioner sources NETEVO cites when the director-duty argument needs full saturation in front of AU listed and pre-listing leaders. Each paper holds a distinct corner: practitioner framing, academic doctrine, and operational-failure analysis.

A board-paper artefact for AI-washing audit work. The failure-consequence frame maps cleanly onto the thesis of the forthcoming AI-Washing Audit whitepaper — that paper governance produces these failures, and engineered governance prevents them. Bednarz and Bennett supply the peer-reviewed AU vocabulary in which that contrast can be expressed without leaving the board's own register.