Corporate boards that prioritise new technology to boost value creation and democratise governance are in a strong position to prevent operational risks, the chief executive of advisory Board Intelligence has said.
Boardrooms need to take “meaningful” steps to analyse trends and to let their organisations understand the transformation being made by technology, such as how artificial intelligence is changing the workforce, Pippa Begg told The National.
She added that this is a process over time, in fundamental and literal ways. AI, for instance, can significantly condense data from several years to be readily used, and boards must make their organisations understand that changes will come as gradual shifts.
“In an AI era, one thing that often holds boards back is the quality of information and their time to prepare, as well as skills and experience they may have had from their past,” Ms Begg said in an interview.
“AI can democratise governance in many ways. If I now can access more information than I ever could before to help inform my judgment, I don't necessarily need to have had those 20 years' experience set in a boardroom in different scenarios,” she said.
“I can potentially start that journey earlier but with access to more information and insight to help me along the way than ever before.”
Corporations' methods to soothe fears over jobs being lost to AI – a concern for current and prospective employees – are “improving rapidly”.
Ms Begg acknowledged that jobs would be lost, but said it would be more important for companies to identify new roles to be created by emerging technology “and put those down on paper”, before eventually implementing them.
A transparent path towards secure jobs is key, she noted. “We have seen more executive teams and more boards make [statements like]: 'We're going to take meaningful steps in the right direction … creating that vision of change,'” she said.
“We've seen much more material progress in people being bold and ambitious and painting that vision.”
Region's boards top AI users
Corporate boards in the Middle East have been ranked first globally at leveraging technology to boost value creation within their organisations, Board Intelligence's Board Value Index showed on Thursday.
Regional boards are also the most confident about their value and the most forward-looking. They are bullish about using technology and the “furthest ahead” in using AI for decision-making, London-based Board Intelligence said.
The biggest challenges to effective decision-making – as Ms Begg noted – are the skills and expertise needed. About 80 per cent of Middle East directors report that skills gaps have caused at least one delayed or poor decision in the past six months.
Ms Begg said the data samples for the UAE, the Arab world's second-biggest economy, were generally consistent with the rest of the Gulf region.
However, boards in the Emirates are more likely to expect a complete reimagining or significant transformation of how they operate and to be engaging with quantum computing as a strategic opportunity, according to country-specific data shared by Board Intelligence with The National.
“The boards of the future will need to be more digitally literate, more diverse, data-informed, and more comfortable operating in ambiguity,” Raja Al Mazrouei, an advisory board member of Board Intelligence, wrote in the report.
“We have an opportunity in this region to leapfrog legacy governance models and redesign governance around agility, intelligence, and strategic oversight,” added Ms Al Mazrouei, who is also chief executive of the UAE's Etihad Credit Bureau.
Overall, boards in the Middle East, with a backdrop of economic diversification programmes such as We the UAE 2031 and Saudi Arabia's Vision 2030, are more forward-looking and have a greater contribution to value creation, Ms Begg said.
“Those visions essentially create not just a framework, but an expectation of innovation [and] growth that boards are operating within,” she said.
Meanwhile, geopolitical turmoil such as the US-Iran war “inevitably creates far more risks” that boardrooms need to consider, Ms Begg added.
“Geopolitical tensions create extra pressure around how many organisations are really going to make big bold bets and how many begin to pare things back because of the inherent risk of execution over the short term or the long term,” she said.
“The largest decisions that boards make are around resource allocations, the plans for the year ahead – and they need to be held accountable to deliver against them.”
