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    When AI writes the news

    Artificial Intelligence Corporate Governance Decision Making Governance Management Tough Questions
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    Today is the last day of 2024, the day many people reflect on the year gone and ponder what might lie ahead. Everything from checking off goals set twelve months earlier, to setting goals and resolutions for the year ahead. I am amongst those who 'reflect and set' around this time of the year. Normally, the exercise involves reading back through notes and notebooks, and pondering goals. This year, I asked for help; not help from anyone who knows me really well, but from a newly-released LinkedIn feature, Coauthor. 
    This is what Coauthor, an AI tool, curated, in both textual and info-graphical form:

    What happens when a board advisor steps into new territories while staying true to core principles? 2024 showed me. The year brought significant evolution in how I serve boards and directors, particularly through co-founding govern&; with Jurate Stanisauskiene to help boards in the Baltics achieve sustainable outcomes.

    The year brought meaningful progress:

    • Co-founded govern& to serve boards in Baltic region
    • Joined Editorial Board of Advances in Corporate Governance Journal
    • Completed significant governance review work for Baptist Union of New Zealand
    • Expanded influence through international speaking engagements

    Yet the core mission remained constant: helping boards govern with impact.

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    While I may not have highlighted these specifics 'by hand', the general tenor of the summation by Coauthor is pretty good—save one word: expert. While my record implies a level expertise in several areas, I make no claim to be an expert director, expert advisor or even a governance expert. To use 'expert' in this way is, I think, self-aggrandisement. I am, straightforwardly, someone with a deep interest in the performance of organisations and the contributions of boards of directors.
    So far, so good. But what of the future? How does AI do when looking ahead? What does Coauthor have to say in relation to 2025? This:

    govern& will expand its impact in the Baltics while I continue advancing thought leadership in corporate governance. The focus remains helping boards see around corners and make decisions that drive sustainable outcomes.

    This is a reasonable attempt, as far as it goes. What Coauthor does not, and cannot, 'know' is what sits in the wings, much less how other as yet unknown factors might influence me in 2025. My intent to finish writing Boardcraft: The art of governing with impact is not mentioned, nor is a significant initiative to support boards in several developing nations, or speaking engagements at conferences in New York and Milan. And therein lies a critical limitation. When AI writes the news, it can but summarise the past. And, generally, speaking, it does this very well. Making statements about what might lie ahead is much more difficult; anything requiring mimicry of human traits—such as intuition, reasoning, sense-making and undeclared preferences—are beyond its capabilities.
    Boards need to bear this in mind when considering if, how and where AI might 'fit' when considering strategic options. AI can be an incredibly powerful enabler, and its application to drive efficiencies and expose new sources of competitive advantage should be explored. But, great caution is needed: as attractive as the outputs from LLM models appear to be, their predictive power beyond the next word, or ability to credibly simulate social traits, is rather more limited. 
    Regardless, thank you for your supporting 2024, and best wishes for what lies ahead in 2025.
  • Published on

    Artificial intelligence and board work

    Accountability Artificial Intelligence Corporate Governance Decision Making Effectiveness Governance Research Update Tough Questions
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    Several times in the past six weeks, I have been asked to share some thoughts on artificial intelligence and board work; specifically, the impact of emerging AI capabilities on corporate governance and, even, the need for board of directors. The rapid emergence and now widespread awareness of ChatGPT has been a catalyst for many of these enquiries, it seems. I have been fascinated by the unfolding situation, not only because of a longstanding interest (I studied artificial intelligence at university nearly four decades ago), but also the speed by which awareness has spread, and expectations climbed to such stratospheric heights, is unprecedented. Claims have been made that computer-based tools will soon supplant the need for human directors and, with it, board meetings. Some, especially those with jaundiced perceptions of boards, their work and any value they add, have confided this may be a good thing. Others have reserved judgement—for now at least—saying the situation is far too fluid and complex to make anything approaching an informed or reliable decision, much less widespread change.
    That so many people are questioning 'conventional' corporate governance practices feels a little bit like ground hog day. While I do not claim any particular expertise in the topic of artificial intelligence, I have read widely, asked many questions (of myself and others) and pondered both the purported capability and potential impact (of artificial intelligence) on board work. ​
    The departure points for my enquiry has been, as always, definitional. What is artificial intelligence, and what conception of governance does one hold? My responses to these questions are as follows:
    • Artificial intelligence: the development of computer-based capability to perform tasks that normally require human intelligence. In effect, the simulation of [aspects of] human intelligence by machines.
    • Governance: the provision of steering and guiding an organisation [towards an agreed goal], by the board of directors. In effect, governance is the work of the board—the means by which companies are directed and controlled.
    So, the proposition to be considered is, "Can a computer replace a social group charged with steering and guidance an organisation in a complex and dynamic environment?"
    Those people wondering whether AI might be a viable mechanism to support or even replace boards have much to ponder. What is the role of a board of directors in companies? How might the operating context beyond the organisation be assessed? Where does accountability for statutory compliance and overall performance lie? And, to whom should the Chief Executive and management of the company report? If one holds the view that the board is the ultimate decision-making authority within a company (a responsibility delegated by shareholders), and that this (decision-making despite uncertainty and ambiguity) is 'core business', the board has a vital role to play.
    My early training in computers and technology taught me that computers respond to instruction; they cannot 'think' autonomously or handle ambiguity, and they lack feelings and intuition. They do what they are 'told'; if the 'telling' is poor, the result is likely to be poor: the phrase "garbage in, garbage out" springs to mind.
    But that was then. Computing power is far greater today than it was even five years ago, much less forty. Has the evolutionary development of computing capability reached the point whereby computers can displace humans? For a large and growing list of tasks  and activities, yes, of course. The analysis of data is a relevant case in point. But for many other enquiries, the answers remains a resounding no. How might a computer make sense of the unspoken feelings, intuition and biases of staff, customers and board directors, and reach a credible decision? For this, a much higher order of capability is necessary. And, with that, I stand with those reserving judgement. 
    What of the future? AI may become a viable mechanism to expedite board decision-making, of course. But the likelihood  of directors being supplanted any time soon is low (those failing in their duties excepted). For that, artificial general intelligence (AGI) is likely to be necessary, and some moral and ethical questions will need to be resolved as well. If that is achieved, I may take a stronger position.
    ​Regardless of whether this muse is sound or not, directors, shareholders, regulators and their various advisors need to be alert, because the situation may change quite quickly.