Smart directors should prepare for the GenAI journey

The big picture: So much has been written about generative AI (GenAI), it seems like a constant buzz inspiring both wonder and fear. But the value proposition is alluring. After witnessing OpenAI’s ChatGPT in action, Bill Gates said, “I knew I had just seen the most important advance in technology since the graphical user interface.”

Between the lines: The opportunities for using GenAI to enhance customer experiences, increase process efficiencies, innovate products and services, and improve productivity are immense.

Yes, but: There are risks and limitations. The risks of disinformation and misinformation span an ever-expanding list of potential, egregious abuses fueling alarm and cries for regulation.

Our point of view: Armed with a baseline understanding, directors should consider the following questions when engaging CEOs and their teams in strategic conversations regarding GenAI:

What is the business opportunity in deploying GenAI?
What are the legal, regulatory and ethical issues we need to address?
How are we sourcing and managing the data used by our GenAI model(s)?
Do we have the talent we need to implement GenAI?
Do we have a governance framework that enables experimentation?
What monitoring mechanisms do we have in place?
How do we set accountability in a GenAI model?
How do we manage the risks?
What are the change management issues?

Board Perspectives

Why it matters: GenAI adds yet another disruptive force for business along with the COVID-19 pandemic, supply chain disruptions, workplace upheavals, talent shortages, inflation and interest rates. The good news is that off-the-shelf software interfaces of GenAI are so readily available it is almost equivalent to software as a service (SaaS).

The bottom line: Smart directors should prepare themselves for the journey.

GenAI is yet another wake-up call for board members. It is not the end game. Private equity firms are looking for the next OpenAI. Data scientists are experimenting with graphic databases that can lead to the next AI leap. The market can expect a plethora of AI startups. With the metaverse, digital transformation initiatives, quantum computing, ever-changing customer experiences, evolving regulatory landscape, and a strong focus on modernising legacy infrastructure to foster agility and innovation, the need to be technology-engaged in the boardroom is clear.

In this digital world framed by the internet, digital devices, smart devices, the cloud and ever-increasing connectivity, mobility, and computing power, directors rooted in the analog age and unable or unwilling to make this transition need not apply.

Go deeper: Read more here, including further discussion and relevant action steps pertaining to the aforementioned questions for directors to raise with management.

(Board Perspectives — Issue 167)

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