Reflecting on the 2024 Swiss Board Day in Bern it has become even more clear to me that understanding the current technological landscape and its associated opportunities, challenges, and risks is now essential for both executive and non-executive board members.
Equally important is staying informed about governance issues related to these technologies, including regulatory challenges and potential pitfalls.
There is now way around it anymore, in order to set the company’s vision and strategy, the board must understand how technology impacts the business and its future value creation.
Consider the narratives surrounding artificial reality (AI). While ChatGPT brought large language models into the spotlight, various AI applications like face ID, image recognition, customer service chatbots, and expert systems for tasks such as self-driving cars and chess have been in use for decades.
Despite media focus on the risks of AI, such as deep fakes and cyber threats, there are significant defensive benefits, including enhancing cybersecurity and verification processes. Boards need to understand AI’s role within their organizations, lead the way in defining “responsible AI,” and ensure issues like privacy, bias, and equity are addressed in AI development and deployment.
Clients, regulators, and markets now expect rapid and effective integration of new business drivers into strategies. Building trust around new technologies with internal and external stakeholders is crucial.
Cybersecurity, augmented reality (AR), robotics, and AI are just a few examples where companies must identify, measure, disclose, and adapt to strategic opportunities and risks. Not all technology is relevant for your company, but the ones that are should be evaluated in detail.
How can a board effectively oversee the long-term growth and evolution of their company amidst ongoing new opportunities and challenges, especially if they lack specific knowledge on existing and emerging technologies and its risks?
Boards should start with leveraging internal company resources. You should seek out knowledge by visiting your company’s offices, attend small group sessions, do production tours, and join town halls to witness new developments firsthand and understand their strategic alignment.
Dedicated training and workshops with relevant experts can help you grasp the business implications of key technologies within their industry. Your trainer(s) should have experience implementing technology in your industry.
What is even more important is that your trainer(s) can explain technology in a way that non-technical people can understand and are able to apply their newly won knowledge onto their business.
The aim isn’t to create a board of tech experts but to shift mindsets, open new possibilities, evaluate risks, and enhance the board’s ability to challenge management in business development.
In a nutshell: In order to set the company’s vision and strategy, the board must understand how technology impacts the business and its future value creation.