Technology is redefining business models

How further education can help leaders drive a strategic approach to digital opportunities in their organisations. 

Board members are highly experienced and, in the past, this was all it took to do a good job. Ongoing education was shrugged off as unnecessary. Times are changing.

“We have to recognise that what we knew yesterday will not serve us well tomorrow,” says Associate Professor Lynn Gribble of the UNSW School of Management and Governance, known for her work with AI and higher education. “Even if we desire just to stay where we are, that requires constant learning and constant adaptation.”

The development of AI and machine learning has made the need more urgent. “Only by staying updated with the latest technological trends and innovations can directors lead their companies through transitions, rather than merely reacting to changes,” says Cheryl Hayman FAICD, an experienced non-executive director whose current boards include Ai-Media Technologies, Silk Logistics Holdings Ltd and Guide Dogs NSW/ACT. “This proactive stance is crucial for maintaining a competitive edge and driving long-term success.”

Baseline understanding of AI

Technology is redefining business models and streamlining operational efficiencies. Directors need to understand how this is being achieved.

“Regulatory environments are becoming more complex and stringent, particularly around data privacy, cybersecurity and ESG,” says Hayman. “AI-driven compliance tools enable real-time monitoring and reporting, reducing the likelihood of regulatory breaches and the associated penalties. Traditional reporting methods are also giving way to real-time data analytics and dynamic reporting tools. Directors must be adept at interpreting data from these advanced systems.”

They must also be aware of AI’s potential to perpetuate bias, that so-called “hallucinations” can produce ridiculous or wildly inaccurate outputs, and of the risks associated with intellectual property. The World Economic Forum has described generative AI as disrupting traditional views of creativity, authorship and ownership, and pushing the boundaries of copyright law. Yet this is still a grey area, with little or no regulation.

“It’s a massive issue,” says Roger Dennis, a foresight strategy consultant. “These models are trained on huge data sets, which are supposedly freely available online, but may include copyrighted material. This can lead to inadvertent copyright infringement.”

Organisations have already started filing lawsuits. For example, The New York Times alleges that OpenAI, creator of ChatGPT, used its copyrighted material to create and benefit financially from AI products.

There’s also a risk that generative AI will reveal sensitive information, customer data or trade secrets. Companies such as Apple, Spotify, Verizon and Samsung are so concerned that they have banned or limited the use of generative AI among their employees.

“As AI systems take on more decision-making roles, directors must oversee their ethical deployment,” says Hayman. “The board’s ability to set robust frameworks and guidelines for AI use will help to safeguard the company’s reputation and social responsibility.”

Ways of learning

Generative AI gives a new meaning to “ongoing learning”.

“If we’d been having this discussion 12 months ago, it would have been quite different,” says Dennis. “Change is accelerating to the point where even experts that I talk to have challenges keeping up.”

So how can directors gain the level of information they need?

“You can get a good feel for the topic by listening to podcasts, subscribing to newsletters and following thought leaders on LinkedIn,” says Gribble. “I work with futurist Andrew Grill and can recommend his podcasts and new book, Digitally Curious, as easy to absorb and understand.”

The AICD recently developed the Directors’ Guide to AI Governance in partnership with the Human Technology Institute (HTI) at the University of Technology Sydney. This is a suite of resources to help boards navigate the ethical and informed use of AI. Other online learning platforms and digital courses also provide on-demand access to a wide range of subjects.

“We all learn in different ways, so it helps that you can choose from media such as short video modules, interactive simulations and downloadable resources,” says Hayman. “Webinars and virtual workshops hosted by industry experts are another valuable resource. These live sessions can be attended from anywhere, saving travel time and expenses, while still providing the opportunity for real-time interaction and networking. Recorded sessions allow directors to revisit the content whenever they want. Mobile learning apps also provide opportunities through microlearning — consuming bite-sized educational content during short breaks or commutes.”

You could also use AI to learn more about AI. “Generative AI and machine learning can personalise the learning experience by tailoring courses and materials to your needs and knowledge gaps,” says Hayman.

Gaining knowledge about generative AI will complement the foundational governance education the AICD provides and broaden the skill set in the boardroom. “Our job is to be across the entire landscape in which our organisations operate,” she says. “You can only do that through learning continually and consistently, and being prepared to step outside your functional and comfortable zones of operation, to ensure you know what to ask, how to frame a query in today’s world, and where to focus attention.”

Integrating best practice

As with most other aspects of AI, best practice is hard to pin down.

“What’s good for your organisation won’t necessarily be good for mine, so I prefer to think in terms of better practices,” says Gribble. “That can start with reimagining your business and strategy in line with the things a machine or computer can help you achieve. For example, when technology is taking care of mundane and routine tasks, the nature of your entry-level jobs will change. You can give people more interesting jobs and encourage them to use their brains on the things machines can’t do.”

Dennis believes a good board will have diversity of thinking around the table. “Not every director will be running at the same speed on every topic, but they will have a deeper knowledge of their own subject,” he says. “These days, that deeper knowledge should include AI and digital transformation.”

Hayman notes that directors need to acknowledge their knowledge gaps, find ways to plug them, and share their learned and lived knowledge. “Your biggest challenge could be convincing, directly or through osmosis, those who think they already know everything to join you on this journey for the greater good of the boardroom,” she says. “These actions might take you outside your comfort zone, but, in the end, you can feel confident you’re helping to build the skills necessary for the boardrooms of the future.” 

Empowering leaders

Cybersecurity, the rise of AI and automation, the future of skills and work, and the shift to sustainability are key issues Australian businesses have had to confront in the past year, says Magnus Gittins, chief executive education officer at Melbourne Business School. That means it is even more crucial for leadership development programs in Australia to include opportunities to harness the benefits of digitalisation.

“Embracing technology and innovation is one thing, but leaders who can make informed decisions about them is another,” says Gittins. “Adopting new technologies, leveraging data analytics and exploring digital transformation are most effective when leaders have the skills, knowledge and confidence to know what they’re doing. There’s no better place to gain this insight than from a focused, structured learning environment.”

He notes that further learning empowers leaders with the skills and strategic mindset to identify and realise opportunities that will drive long-term success and competitiveness for their organisation. This can be achieved via:

• Short courses where participants can acquire specific new skills within days or weeks and apply them to the workplace right away. “Participants return to their organisations more engaged and motivated, with a rich diversity of perspectives from other industries,” he says.

• Customised courses for organisations, programs tailor-made to solve a specific organisation’s strategic challenges. “Customised courses need to be much more digital-first to reflect the needs of an organisation,” says Gittins.

• Advanced degree programs, such as those in business analytics or an MBA. “While programs like these require a longer-term commitment of at least one or two years, it’s worth considering for people looking for more formal opportunities to develop a foundational understanding of business theory alongside a diverse, highly driven group of their peers,” he says. 

This article first appeared under the headline 'Digital Director 101’ in the September 2024 issue of Company Director magazine.