Abstract While the Dodd–Frank Act (DFA) mandates board risk committees for large banks, we argue that such committees do not benefit all banks. Banks forced by the DFA to adopt a board risk committee do not experience a reduction in risk following adoption. In contrast, banks that voluntarily established risk committees before the DFA exhibit lower risk, especially when these committees possess greater risk expertise. Using unique interview data, we find that board risk committees serve as active monitors rather than merely rubber-stamping management proposals. However, regulatory-mandated tasks limit their monitoring role.

ABSTRACT Results from multiple experiments demonstrate that evaluators more favorably evaluate creative output produced by designers with higher expertise, even when the underlying creativity of the output is held constant (hereafter, expertise bias). We find, however, that this bias is mitigated when evaluators know that Artificial Intelligence (AI) can augment creative design processes, because AI’s capabilities reduce the perceived exclusivity of designers’ domain expertise. We also show that designers can restore the perceived exclusivity of their expertise, reestablishing the expertise bias, by choosing not to use available AI tools. Although prior research focuses on AI’s ability to enhance or inhibit the creativity of output, we highlight that it can enhance the creative process by mitigating a prevalent human bias in the subjective evaluation of this output. We also contribute to a better understanding of why some experienced designers refuse to utilize AI. Data Availability: Data are available upon request. JEL Classifications: L29; M41; M55.