The one thing every board member asks for
“Nose in, fingers out.” This is the golden rule, so to speak, for corporate boards. Board members already have a long list of critical issues in view, including risk and reputation management, CEO advice and encouragement, financial performance and growth opportunities. Naturally, no one expects them to get involved in the technical operations detail as well.
The question is, “Why do we need to discuss artificial intelligence?”
This is what I usually hear when encouraging board members to put AI on the agenda. But while the question remains the same, the reasons for council members’ bewilderment vary – and that says a lot about the misconceptions about what goes down the proverbial pipe.
“Our plates are already overflowing,” some say, “How is that a priority now?”
“We’re not a tech company,” others remark, “AI is not a board-level issue.”
“We already have so many digital disruptions to solve,” still others say, “Why is AI more important than all other technological problems?”
I sit and smile, because they’re right, in a conventional business setting. But what is happening – and is about to happen – as a result of AI is anything but conventional.
AI is an existential threat in all sectors
Artificial intelligence is a board-level problem because of its singular capacity for exponential disruption. It will disrupt the global business and consumer landscapes more deeply and radically than any previous technology in the history of technology. I say this without hyperbole.
Here’s why: AI is improving every day with little to no human interaction. But not just incrementally: once it has embarked on a particular goal and is fed with enough data, a well-developed AI operates in a continuous feedback loop that improves outcomes exponentially. With each new degree of precision and achievement, the AI increases performance even further, until the momentum for improvement is irresistible. Once a player reaches this flying effect, it will be impossible for competitors to catch up. This is what I call the “Winner Takes All” paradigm.
The health industry provides many ready examples. In radiology, for example, artificial intelligence is already detecting signs of serious health problems like cancer that humans cannot identify, even after the fact. These AI diagnostic systems are learning from live data from millions of scans, getting better and better, until one day soon, AI will almost certainly make human-only radiological diagnostics obsolete. . Likewise, AI is dramatically reducing the time and cost of developing new drugs and vaccines, as we have seen with COVID-19. What once took a decade or more and sometimes billions of dollars, can now sometimes take less than a year and a fraction of the price, thanks to AI. Pharmaceutical companies that are falling behind in the AI arms race simply won’t be around in ten years.
But it’s not just healthcare that will be disrupted by AI. Retail, transportation, finance, insurance, and virtually every other industry are all up for grabs in ways we’ve never seen before. This makes artificial intelligence both the biggest competitive handicap and the biggest growth opportunity facing most companies today.
The AI revolution is already underway
Ok, so AI is a board-level issue, even for organizations that don’t consider themselves technology companies. But do boards really need to worry about it urgently and immediately?
The answer is right in front of you.
AI is already present in the products and advertisements you see online. It’s in the entertainment content that you consume. AI works hard to determine which stocks, bonds and commodities are bought and sold, and protect you from cyber threats. In ways that are really hard for most of us to imagine, AI is already changing who you are and how you and your customers think.
To put it bluntly, if you’re a board member who thinks AI isn’t a board-level issue, you’re probably a corporate liability.
Here’s how councils can approach AI
There are three things councils can do today to effectively address this important challenge:
Drive AI strategy and action from the top
Just as boards are tasked with monitoring other risks and opportunities facing their companies, they should also begin to see themselves as the drivers of AI strategy. Make sure there is a clear and bold strategy and AI champions on the board. Learn about what’s already happening in your industry and make it clear to the CEO that AI is the 800-pound gorilla in the room.
Start ruling the AI now
The path to success in AI is strewn with pitfalls ranging from built-in bias to unimaginable consequences. It’s new, it’s complex and there may be unforeseen economic, political, social and environmental consequences. Advice should take into account AI governance are as much part of their reputation management responsibility as ESG initiatives. Now is the time to start determining your definition of responsible AI and putting your standards in place to guide ethical, transparent, and fair use of AI.
Don’t be afraid to ask
Most board members know how to spell AI, and not much more. That’s okay, the AI revolution is very young, and it might take some time for those who may not be “not so young” to catch up. Start learning. There was a time when the internet, social media, and smartphone technology also seemed out of reach. Don’t be afraid to ask for advice. Better informed board members make better advisors.
Not only is artificial intelligence well within the purview of the board, but I would argue that it should be one of the highest and most pressing priorities of the board. AI is about strategy, vision, opportunity and risk management, not a “tech thing”. My advice to board members? Get your nose into artificial intelligence, as soon as possible.