Artificial intelligence, big data, digital literacy, the collaboration between humans and robots, decentralization, automation, robotization. All these terms are already present in public debates and every member of an organization’s team will be influenced by new technologies and its integration. In this article, we will explore how technology will influence the governing bodies of companies, what board members and organizations need to do to stay relevant in the future, and strategies to adopt and thrive.
New Technologies Are Already Changing Corporate Governance
Over the past decade, discussions about the role of corporate governance centered around transparency, diversity, strategy, accountability, and risk analysis—all of which have sparked fierce debates and gave rise to new business models as well as governance rules.
Imagine a future where a virtual assistant organizes meeting agendas and prioritizes emails based on usage habits. Or a future where the development of neural networks and similar technologies will further deepen human-robot collaboration. There are already concrete examples around the world. In Japan, venture capital company Deep Knowledge has had an AI robot as a board member since 2014. The company stated that AI has been involved in major business decisions. The robot, named Vital, was chosen for its ability to identify market trends that weren’t visible to humans in an effort to contribute to investment success. It is the world’s first software program to be appointed to a board of directors.
Embedding AI into the practices of company boards is not about leaving their work on autopilot, but rather orchestrating and organizing work and collaboration around people and robots.
The transition to new and complex technologies accelerated in recent years, with companies around the globe investing in robotization and automation. According to an Allied Market Research report, the size of the global industrial robotics market was $37,876 million in 2020 and is expected to reach $116,848.7 million by 2030—with a CAGR of 11.7% from 2021 to 2030.
From Small Companies to Decentralized Autonomous Organizations
The “Platform” business model disrupts traditional business models while facilitating a transfer of information, economic exchange, and connections between people. The shift from product- and service-based businesses to online platform-based businesses brings new implications for management teams as members can collaborate, view, and comment on documents in real-time from any device. In addition, in the context of the decentralization of work and the explosion of the collaborative economy, emerging technologies, such as AI and blockchain, also foster the emergence of new business models—such as DAOs (Decentralized Autonomous Organizations).
Corporate Reputation Management Will Become Increasingly Important
The need for transparency is putting more pressure on companies, and board members are no exception. There are many examples of board members who have become known around the world due to their public actions or social media posts that had an impact on their companies—and not always positively. Perhaps one of the best-known examples is Facebook/Meta (who fell to 98th place out of 100 in the list of the largest reputable companies) following the scandal surrounding the processing of confidential data, fake news, and relationships between team members.
Board members will have to rethink their approaches—and their digital, technical, foresight, and ethical skills will have to be enhanced. New roles, such as Chief AI Ethics Officers (CAIEOs), will likely become crucial positions in the director boardroom.
Conclusion
Future-ready boards need to be made up of professionals interested in the future. According to a Deloitte study, companies with technology-savvy boards perform better, and experience an average of 5% increase in revenue over a 3-year period—and an 8% better year-over-year share performance.
Executives will need to display digital literacy, an understanding of the power of Big Data and ethics at a higher standard than ever before.
