How Artificial Intelligence Will Change Corporate Governance

Aleutie/Shutterstock

Growing investments in Artificial Intelligence (AI) technology have transformed many areas in the business world, especially among high-tech and financial organisations. External spending on AI-related projects went up to $12 billion in 2016.

Companies looking into AI may focus on the potential for automating low-skill tasks, but they are overlooking a major opportunity. Artificial Intelligence can also play a significant role in corporate governance. AI can help streamline decision-making processes, transform big decisions from gut feelings to data-driven knowledge, and better predict the future outcome of such decisions. As such, AI can improve an organisation’s leadership.

Streamlining Corporate Governance

Companies like Salesforce have already started implementing AI tech into their boardroom to help settle disputes. CEO Marc Benioff has “hired” an AI “assistant” called Einstein.

According to “ Business Insider,” Einstein accompanies Benioff to all of his meetings. After everyone has spoken, Benioff can turn to Einstein and ask the AI what executives “need attention” and which ones are giving him inaccurate information.

The data gained from AI technology works well as a persuasive tool for other C-level executives or the board. Weeding out the high-level intel is a task most executives and board members abhor.

Yet the tech is simply helping the board to make more streamlined decisions and decide whom to trust.

AI: Data Over Feelings

Deep Knowledge Ventures, a VC firm based in Hong Kong, is thought to be one of the first organisations to add an AI to their board. The technology acts as an observer and provides useful analysis and insights for the rest of the members of the board.

The fund focuses on biotech and biomedical projects and uses the AI to steer clear of investments that sound promising, but actually end up being overhyped.

The objective framework in place also provides another perspective on risky business moves. Deep Knowledge Ventures allows its AI to gather information and look at it objectively. The firm now likens the “gut decisions” they once relied on to betting money in a casino.

Being able to disrupt your industry is a benefit in today’s business landscape, but only if that pivot is a good move for the organisation.

Predicting Outcomes

Many companies are also using AI to forecast the outcomes of corporate lawsuits. Avoiding hefty legal fees or investing in the right legal counsel gives a corporation a huge advantage over the competition. It can also address possible governmental push back with a deal or merger, like when the FCC or Supreme Court could block an agreement. AI can simply prepare the board for every possible scenario.

Board Push Back Over AI

A future approach to AI in the boardroom can be by treating the technology as an augmentation to the board’s abilities. They get a helping hand with tasks that are tedious for a human to track.

Any documents and reports that you send to directors get customised based on their personal and professional preferences. They spend less time getting to the elements most important for their decision-making process, and the AI can speed up this personalisation process. This way, AI can significantly improve corporate governance, but full-scale adoption might be still far away.

Dangers of AI in Corporate Governance

Buy-in at the executive level is another challenge, especially if board members fail to see the AI as a complementary tool to their operations. Explaining more about the type of AI solution you are using and how it operates, can go a long way toward addressing these concerns. This is especially important for people who are not as tech-savvy as the directors of IT and other technology leaders. For some people, AI means the same thing as an autonomous robot from a sci-fi show.

Nevertheless, corporate governance can gain a lot from the deployment of an AI solution when used as an augmentation for high-level talent. Leveraging these solutions is essential for future-proofing your organisation and taking your next steps forward.

If I managed to retain your attention to this point, leave a comment describing how this story made a difference for you or subscribe to my weekly newsletter to receive more of this content:

Dr Mark van Rijmenam is the founder of Datafloq, he is a globally recognised speaker on big data, blockchain and AI, strategist and author of 3 management books: Think Bigger, Blockchain and The Organisation of Tomorrow. Connect with me on LinkedIn or say hi on Twitter mentioning this story.

I think about technology & the impact on business & society. Author of 3 mgt books. Founder of Datafloq.com & fighting fake news, bots and trolls with Mavin.org