Vice Chairman, CEO and Board Services
Accelerating the AI Agenda
After years on the periphery of boards’ oversight agendas, artificial intelligence may be rapidly moving to the forefront.
The recent release of ChatGPT—an artificial-intelligence bot that can create original content virtually as well as a human being can—has produced a new urgency among business leaders and boards across industries to accelerate their AI strategies, or risk being left behind. During the most recent round of earning calls, for instance, a Reuters analysis found that tech execs used the terms “AI,” “generative AI,” and “machine learning” two to six times more often than they did in the quarter before ChatGPT’s release.
But it isn’t just tech execs who have heightened their focus on AI, says Alan Guarino, vice chairman in the Board and CEO Services practice at Korn Ferry. “Since the launch of ChatGPT, corporate leaders have become more aggressive in thinking about artificial intelligence and machine learning,” he says. “That has drawn board attention and moved AI higher up in the strategy agenda.”
Directors themselves are likely to leave the specifics of strategies up to management. And numerous surveys heading into the year show boards ranking economic conditions, risk management, talent agenda, and capital-allocation strategy ahead of AI and other evolving technologies.
But that was before ChatGPT hit the market and grew faster than any other application in history, reaching more than 100 million active users within two months. ChatGPT’s superior capabilities—it can write everything from poetry to business plans, remember past conversations, and even respond to emotional cues—have captivated the general public. On the business side, the application can dramatically improve productivity by automating certain tasks, which dovetails with the need to both fill gaps left by the labor shortage and minimize financial fallout from the economic downturn. “The predictive ability of AI is becoming more important for boards as they seek to anticipate instead of react to risk, change, and trends,” says Jane Stevenson, vice chair in Korn Ferry’s Board and CEO Services practice and global leader of the firm’s CEO Succession practice.
Some firms have been ahead of the game, investing unprecedented sums of money in artificial intelligence and machine learning. In 2022, for instance, generative AI applications like ChatGPT raised $1.4 billion, almost equal to the previous five years’ worth of investment in the sector, according to Pitchbook data. Experts expect investment to rise again in 2023.
But as boards review management strategies, many will be expecting their firms to address some of the thorny ethical questions ChatGPT raises, from copyright infringement to job applications covertly written by AI. Some boards are also looking hard at AI skills and talent, both within the company and among directors, says Chris Cantarella, a senior client partner and global sector leader for software at Korn Ferry. Cantarella says he is already seeing a shift among non-tech companies to accelerate their transition to “greater AI enablement.” As a result, he expects boards to push management to hire tech talent at a rate not seen in decades. “Tech talent will spread quicker and deeper across industries now,” says Cantarella.
That includes boards as well. Cantarella says the release of ChatGPT is prompting leaders, investors, and directors to take a hard look at board composition because “too many directors are not up to speed on AI and made their mark in business in a ‘non-AI’ age.”
For more information, contact Korn Ferry's Board and CEO Services or Software & Platforms practices.