Could AI replace the Board?

A couple of decades ago, when I was advising the UK National School of Government on board development, we had an impromptu, informal competition to find the image that best represented the relationship of Boards to the organisations they led. The winner by a large margin was a ghost carrying its severed head under an arm. The head was still there but not connected to anything.

That image has increasing resonance, to the extent that I am now having more and more conversations about whether Boards as we know them, are obsolete in a fast-evolving, digital world.

The word Board originally meant a table[1]. In the context of governance, the King sat at one end, in an elaborate and dominating chair, and the rest of the decision-makers sat on benches along the sides. The UK Parliament is still designed on this model. Board structures today vary from nation to nation, but most retain the role of a Chair, meet relatively infrequently and are responsible for the approval (if not the generation) of strategy. There are also fiduciary requirements relating to prudent management of resources, ethical behaviour and responsibilities to shareholders.

There are several reasons to question this model in the modern world.

• The pace of change means that the frequency of Board meetings and the pace of change within the organisation area increasingly out of sync.
• The intent of non-executive directors was to balance the internal focus of executives with NEDs’ more extensive connections to the external world. However, most NEDs are former Executives, with similar mindsets. Increasing racial and gender diversity on the Board does little to connect with the breadth of external or internal stakeholders, especially those, who are underprivileged.
• The development and application of strategy is increasingly emergent. It’s more and more about engaging with systemic change and adapting rapidly to opportunities. It’s becoming harder and harder for a Board to add any value to this process, except by creating a broad sense of direction and boundaries.
• And then, there is the spectre of Artificial Intelligence…

Among the impacts of AI, according to  Mustafa Suleyman, co-founder of DeepMind are to speed everything up and to shift where power resides. Augmented by AI, the shift of power now happening in organisations is towards the middle and the edges. The edges of the corporate amoeba sense what is happening externally and the middle coordinates rapid responses. The Executives and NEDs of the Board are increasingly irrelevant and potentially in the way, if they hang on to the traditional key levers of power, such as controlling access to finance.

So, is there a role for the Board in tomorrow’s world? Yes, but much adapted. The purpose of the Board will become to curate the organization as a constantly evolving system – and not to try to control it. Curation in this sense involves:

• Being the moral guardian of the company’s values
• Supporting the well-being of the system and everyone within it
• Continuously coaching the system rather than directing it.

We don’t yet know how AI might support the new-look Board in carrying out these radically different priorities. Nor is it clear whether today’s Board members have the skills to adapt. One of my current areas of interest is developing ways of helping Boards recognise and meet the challenge – before AI makes them redundant!

[1] Hence the term “bed and board”.

© David Clutterbuck January 2024