Embrace AI or risk failure: Why directors must harness technology for growth

As extraordinary new technologies unlock fresh ways to understand customers, streamline operations and create competitive advantages, boards must grasp the nettle and ensure their technology infrastructure doesn’t lag behind that of their rivals or they risk being left for dead.

The message from Quantium CEO Adam Driussi at the AICD’s inaugural Tech Governance Forum last month in Brisbane could not have been clearer. Company directors have to interrogate how they use AI personally, while overseeing its implementation to grow their organisations. Failure to do so could be catastrophic.

“As a board member, the number one question you should put to management would be to ask the CEO how much they use AI personally in their job,” he said. “If they don’t use AI in everything they do, how will you expect that to permeate through an organisation?”

The Forum featured a line-up of 17 speakers renowned in their fields and opened with a keynote address by author and technologist Dr Catriona Wallace, who highlighted the moral, strategic and governance imperatives of AI.

She also stressed the potential for “singularity” — the theory AI may no longer require its human masters – within a decade, meaning it was imperative to have appropriate frameworks and legislation in place to manage its rollout.

“This is not a tool, it’s a power,” said Wallace. “It’s a force and we need to get our arms around it.”

Disruptive power

The disruptive power of such technologies demands dramatically new approaches to governance, said Dr Larry Marshall FAICD, physicist, entrepreneur, venture capitalist and former CEO of CSIRO.

Marshall argued that traditional governance practices could “kill” necessary innovation. “It used to be nice to have innovation because it maximised your profitability, but now you need it just to survive,” he told delegates.

Directors needed to manage the inherent tension between doing things fast versus doing things ethically and legally, he added.

Leap boundaries

“Technology today enables competitors to leap over market boundaries and crash through barriers to entry,” said Marshall.This enabled small, nimble, previously unknown companies to take on and “destroy” even established market leaders.

“We need to rethink our governance principles for creating more innovative companies, so that we start moving exponentially in parallel, instead of linearly, the way traditional companies do,” he said.

Marshall urged established boards to consider technological or entrepreneurial know-how to be as critical as other areas of expertise such as accounting, finance or law.

Spot opportunities

He said the very different skill set that “techies” brought to boards meant that they were more likely to spot the opportunity when a new challenge is presented. 

The management team was “too buried in the day-to-day operations of the company” to see beyond their market vertical in the way that out-of-the-box entrepreneurs do. Board directors, on the other hand, “are supposed to stand on the balcony (and) look out across lots of things we do”.

However, they didn’t necessarily have the skills to formulate an all-encompassing “market vision”.

“The board's job is to continuously interrogate that market vision to make sure you’ve got it right,” said Marshall. “It’s a new job for most boards, but it is as critical as safety, risk or audit. The culture of the board must reflect… the purpose of the company.”

Delicate balance

Directors must balance the need to innovate against the responsible use of emerging technologies, according to Kee Wong FAICDLife. “AI is here and the risk of not using AI is higher than the risk if things don’t go right,” he said.

Companies that sought to flourish thus needed to view each new problem, product or service, through the lens of AI. “It’s not a question of when you will start using AI for it,” he said.

“The question everyone… should be asking is, ‘Where does AI fit into this?’ It’s a mindset, it’s thinking about AI at the centre.”