The One Thing Every Board Member Asks
“Nose in, fingers out.” That’s the rule—of thumb, so to speak—for corporate boards. Board members already have a long list of mission-critical issues in their sights, including risk and reputation management, advising and encouraging the CEO, financial performance, and growth opportunities. Naturally, nobody expects them to get involved in the nitty-gritty of technical operations as well.
The question is: “Why do we need to discuss Artificial Intelligence?”
That is what I usually hear when I encourage board members to put AI on the agenda. But while the question remains the same, the reasons behind board members’ bemusement varies—and that speaks volumes about misconceptions over what is coming down the proverbial pipe.
“Our plates are already overflowing,” some say, “How is this a priority now?”
“We are not a technology company,” others remark, “AI is not a board level issue.”
“We have so much digital disruption to address already,” still others say, “Why is AI more important than all the other technology issues?”
I sit and smile, because they are right, in a conventional business context. But what is happening—and about to happen—as a result of AI, is anything but conventional.
AI is an existential threat within every industry
Artificial Intelligence is a board level issue because of its singular capability for exponential disruption. It will shake up the global business and consumer landscapes more thoroughly and dramatically than any previous technology has in the history of technology. I say this without hyperbole.
Here’s why: AI gets better every day with little or no human interaction. But not just incrementally better—once set to task on a particular objective and fed with sufficient data, well-developed AI operates in a continual feedback loop that improves results exponentially. With each new degree of accuracy and achievement, AI ratchets performance up even further, until the momentum of improvement is unstoppable. Once a player achieves this flywheel effect, it will be impossible for competitors to catch up. This is what I call the “Winner Takes All” paradigm.
The healthcare industry provides for many ready examples. In radiology, for instance, Artificial Intelligence already spots signs of serious health issues like cancer that humans can not identify, even post facto. These AI diagnostic systems are learning from the live data of millions of scans, getting better and better, until someday soon, AI will almost certainly render human-only radiological diagnosis obsolete. Likewise, AI is dramatically reducing the time and cost of new drug and vaccine development, as we saw with COVID-19. What once took a decade or more and sometimes billions of dollars, can now sometimes take under a year and a fraction of the price, thanks to AI. Pharma companies who fall behind in the AI arms race will simply not be around in ten years.
But it is not just healthcare that will be disrupted by AI. Retail, transportation, finance, insurance, and virtually every other industry are all up for grabs in a way we just haven’t seen before. That makes Artificial Intelligence both the biggest competitive liability and the most important growth opportunity that most companies face today.
The AI revolution is already underway
Ok, so Artificial Intelligence is a board level issue, even for organizations that do not regard themselves as technology companies. But do boards really need to worry about this urgently and immediately?
The answer is right in front of you.
AI is already in the products and advertisements you see online. It is in the entertainment content you consume. AI is hard at work determining which stocks, bonds, and commodities are bought and sold, and protecting you from cyber threats. In ways that are really quite hard for most of us to even imagine, AI is already changing who you are and how you—and your customers—think.
To put it bluntly, if you are a board member who believes that AI isn’t a board-level issue, you are probably a liability to the company.
Here’s how boards can address AI
There are three things that boards can do today to effectively take on this important challenge:
Drive AI strategy and action from the top
Just as boards are responsible for keeping watch on other risks and opportunities that their companies face, so too should they begin viewing themselves as the drivers of AI strategy. Make sure there is a clear and bold strategy as well as AI champions within the board. Educate yourself on 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 governing AI now
The path to success in AI is fraught with liabilities ranging from built-in bias to unimagined consequences. This is new, this is complex, and there may be unintended economic, political, social, and environmental outcomes. Boards need to regard AI governance as much a part of their reputation management responsibility as they do 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 OK, the AI revolution is very young, and it might take a bit of time for those who are maybe “not that young” to catch up. Begin learning. There was a time when the Internet, social media, and smartphone technology also seemed unapproachable. Do not be afraid to ask for guidance. Better informed board members make better advisors.
Not only is Artificial Intelligence well within the purview of the board, I would argue that it ought to be one of the board’s most important and urgent priorities. AI is an issue of strategy, vision, opportunity, and risk management, not a “techie thing.” My advice to board members? Get your noses into Artificial Intelligence, as soon as possible.