Boards and AI Governance_West Sweden Chamber of Commerce

Presentation at West Sweden Chamber of Commerce AW on corporate governance

1. Digital Transformation of Swedish Industry Professor Robin Teigland Chalmers University of Technology www.robinteigland.com | www.slideshare.net / eteigland | [email protected] | @ RobinTeigland

2. People “Net generation” 24x7 “mobile” workforce Gig economy Online learning Sharing not owning Sustainability Technology Broadband/ wifi Cloud, fog Internet of Things AI/ML/DL/NN Autonomous vehicles Smart robotics VR/AR/Holography 3D/4D printing/ALM Blockchains Nanotechnology Quantum computing Open Source Software Hardware Physibles Convergence of….. Finance Microlending /microfinance Crowdfunding/equity/P2P lending Cryptocurrencies, tokens Blockchains , smart contracts Mobile money and payments M2M/R2R payments Value creation

3. Digital is the main reason just over half the Fortune 500 companies have disappeared since the year 2000. -Pierre Nanterme , CEO Accenture, 2016 Yet..Digital disruption has only just begun.

4. Updated from http:// www.visualcapitalist.com /chart-largest-companies-market-cap-15-years/; statista , November 2018 $1.06T $754B $782B $820B 2018 $438B Technology (AI) replacing energy and banking

5. While 63% of CEOs believe AI will have a l arger impact on the world than the internet,…. https :// www.pwc.com / gx /en/ ceo -survey/2019/ report /pwc-22nd-annual-global-ceo-survey.pdf …o nly 6% have AI initiatives on a wider scale in the organization .

6. AI- enabled research of digital transformation Mapping of AI competence in firms AI- enabled analysis of Swedish talent on LinkedIn Mapping of AI competence at board level AI- enabled analysis of interlocking directorates Development of AI Maturity Scale Above results AI- enabled analysis of annual reports and websites Organizational performance Financial Innovation Other ? Regional performance Employment Other ?

7. Old fashioned Governance in the Era of AI Disruption – The Challenges of AI for Sustainable Corporate Governance © All rights reserved Digoshen AB February 2019 Robin Teigland, Professor, Chalmers University of Technology Liselotte Engstam , Chairman & Research Director , Digoshen , NED Fernanda Torre, Researcher , Stockholm School of Economics Anthony Larsson, Researcher , Stockholm School of Economics

8. Companies progressing but leadership falling behind Research; Understanding Digital Maturity – MIT/ CapGemini 2018

9. Boards overestimate their digital savviness 62% of boards report they are digitally savvy Source: MIT CISR 2014 Board Survey, 81 companies. 24% of boards are digitally savvy based on public data Source: MIT CISR 2018 Board Study, 1122 companies, based on coding of public proxy data.

10. Digital Savvy Boards – The Next Frontier Companies with digitally savvy boards 38% higher revenue growth 34% higher ROA 34% higher market growth 3 digitally savvy directors required to impact performance Source: Companies with annual revenues over $1B Savvy boards N ranges from 270 to 297, Not savvy boards N ranges from 852 to 918 Differences are statistically significant in a difference of means test, p<0.05 Source: MIT Research 2018

11. “A single tech savvy director in the boardroom risks being lonely and misunderstood. To effect change at the board level, there must be a critical mass of directors who truly understand; and, ideally, every director is conversant.” —Jenny Banner, Lead Director, BB&T Source: MIT CISR 2018 Board Study Digitally savvy directors change the risk conversation from.. ..the PROJECT RISK of a particular initiative to the BUSINESS MODEL RISK of not doing something new

12. Boards and Top Management not aligned on AI importance Research; AI in Europe & Sweden by EY and Microsoft 2018 (n=267)

13. The challenge for company leadership and boards Rapid advancements in digital & exponential technologies , in particular Artificial Intelligence Increasingly dynamic , complex , and uncertain competitive environments Higher customer , shareholder and stakeholder requirements for fast innovative response with sustainability considerations The Challenge Updated competencies Updated leadership & governance approaches

14. Rethink board processes and procedures (software, tools, etc.) Rethink board competences and mindsets (IT quotas, “ hooders ” on boards) Rethink board task focus (disruptive innovation, new business models) Rethink corporations and value creation (boards in the digital era, digital transformation of society and business) “Boards and four levels of digitalization” - Morten Huse Company- tailored workshop and interviews to assess best practices and develop action plans Multi- company workshops to explore value creation , board dilemmas, best practices Seminars to increase insights in AI- enabled innovation & sustainable value creation Insights from 4Boards.ai reports 4Boards.ai To identify, codify and disseminate a set of best practices to enable corporate boards to more successfully govern and leverage AI and other exponential technologies in their innovation and sustainability efforts

15. Contact Website : 4Boards.ai Email: [email protected] [email protected]