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    Is an elephant [in the room] obscuring our view?

    Accountability Corporate Governance Governance Research Sustainability Value Creation
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    ​The rise of artificial intelligence capabilities over the past 4–5 decades (you read that correctly, not 4–5 months or even 4–5 years) has brought some awkward questions into stark relief.
    • How might AI enable or impair our strategic priorities?
    • Are the data in management reports to the board accurate, and conclusions credible?
    • As directors, we’re supposed to govern with impact. But what matters most amongst the many priorities in the reports from management—and how might we decide?
    • Are the so-called experts that management keeps putting in front of us actually experts, or are they just AI-junkies who have generated content that appears to be informed?
    These questions, and many others like it, highlight an overarching question that has become very real for many directors, more so as the onset of AI-generated content has started to pervade boardrooms, executive suites and beyond:
    The report behind the question brings the problem into stark relief: Many conclusions developed from academic research and peer-reviewed articles may not be reliable. Indeed, many may not be worth the paper (screen) they are written on, despite the seemingly attractive arguments put up by the authors.
    This being the case, how might directors validate the data and reporting in board packs?
    If boards are to govern with impact, they must first ensure the reports they receive are not only accurate but credible. This is a demanding expectation, but it is the baseline. Fortunately, we are not the first people to ponder this matter: This muse explores some of the core considerations.
    The elephant in the room is not AI, per se; it is the directors’ ability to distinguish between what matters and what does not—the signal and the noise.
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    When time is up, act

    Accountability Corporate Governance Effectiveness Leadership Performance
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    These past few weeks, I have been acting as an envoy of sorts—a go-between to help tackle some problems that, ultimately, seem to come down to strained relations between shareholders, directors and senior management. While one case is playing out in a rapidly-growing PE-funded entity, and the other in a smaller enterprise, the situations are remarkably similar: the organisations appear to have outgrown the leadership capability of the CEO, and the board and CEO no longer see eye-to-eye.
    In one case, the leader is the founder; in the other, the CEO has led the entity for over two decades. In both, signs of Founder’s Syndrome​ are apparent. The cases are difficult because the CEOs have led well. But things have changed, and both deny they might be part of the problem, much less that leaving might be the best option for the organisation.
    The cases are proving insightful reminders for me—not only as examples of the destructive impact when behaviours turn negative, but of something most decent management and leadership courses teach: No one is perfect, and no one is indispensable.
    In contrast, consider the actions of these leaders:
    • Sir Rod Drury, founder of Xero and recently-named New Zealander of the Year, has been lauded for his entrepreneurial expertise and success. Yet he stepped away from executive leadership at Xero about a decade ago, and from the board in 2023. The business has not stalled or failed—it has grown bigger and better. 
    • George Washington, the first President of the United States, served for eight years and then retreated to Mt. Vernon, even though he was encouraged to remain President. 
    These men, both highly successful in their respective fields, knew something many chief executives and board directors miss: humility matters. When the time is up, act. Strive to leave on good terms. And, if you think it might be time, it probably is. Chances are, it might be one of the best leadership decisions you make.