In April, 30 Australian business leaders headed to San Francisco with the Trans-Tasman Business Circle for its first women’s study tour of Silicon Valley. The tour had a serious mission — to learn more about the next wave of breakout technologies, namely Artificial Intelligence (AI) and machine learning, and the implications for Australian organisations, the workforce and the economy. With unique access to applications of these groundbreaking technologies, there was much to reflect on from the tour. The theme that resonated most was the future of the workforce.
In the ASX 100 since January 2018, of the 153 appointments made:
68% were from industries that directly related to the company with relevant industry operational experience
15 were directors with tech/digital experience — 10% to boards of non-tech companies
5 had finance sector backgrounds — 8% to non-finance sector boards.
Source: Vine Partners analysis
How prepared are boards and executives in Australia?
At an executive and board level, the relevant skills are in short supply. Even in the honeypot environment of Silicon Valley, there is an insatiable appetite for computer and data scientists, machine learning engineers, augmented reality designers and others who develop and support the emerging ecosystem.
Organisations across all sectors recognise they need to invest in reskilling up to 50 per cent of their workforce. To keep up with the pace of innovation, this reskilling will be continuous. Lifelong learning is not a new concept but the pace and scale of technological change is moving it from cliché to economic imperative.
Reskilling to embrace technological change is as relevant for board members as it is for the workforce. One of the many roles a board performs is to provide direction to management. This includes guidance and mentoring as well as a mechanism for healthy challenge across strategy and operations. A key role of any board is to anticipate, identify and monitor risk. The risks associated with the ethics of AI are just beginning to be understood. If the gap in knowledge, experience and understanding of innovation between management and the board is too great, the board’s ability to perform its role is diminished. If the board doesn’t understand the capability of the technology, it will be challenged to ask the right questions.
How are Australian boards addressing this?
If recruitment of more digital and tech-related skills to ASX companies is any guide, we have much more to do. A notable theme in board recruitment over the past two years has been interest in the appointment of directors with digital and technology skills. However, our analysis of new board appointments to ASX top 100 companies in the past 18 months shows boards are overwhelmingly recruiting for experience from the same sector. Directors
with technology backgrounds going into non-tech companies were the next largest cohort, followed by finance sector directors going into non-financial sector companies. The number of directors with technology and digital experience that are actually recruited in the ASX is minimal (see breakout).
Where will we find the directors companies need?
Companies need directors with the wisdom and battle scars that come from a career in corporate leadership relevant for AI and machine learning. Recruitment processes in Silicon Valley offer some guidance. At an executive level, corporations in Silicon Valley hire not just for creativity, analytical thinking, technology design, programming and complex problem solving, they also hire for potential. Personality attributes such as the ability to learn, collaborate, empathise and facilitate as well as embrace a diverse yet inclusive culture, are highly valued.
As boards seek this next wave of talent, they would do well to focus on the inclusion of directors who bring these valuable skills and who, by modelling the mantra that lifelong learning builds competitive advantage, will drive a culture of continuous learning from the top.
To enable this, the corporate entity will need to invest in education, not just for the workforce, but also at board level. Director development plans must include a dynamic schedule of learning and experiences that will keep them questioning their own skills and capabilities, and those of their companies and leadership.
With boards taking a leadership role, the economy will be better equipped to embrace
AI and machine learning, rather than fearing it.
Kate Harper GAICD is director board consulting at Vine Partners.
Read our full article on innovation from the November issue here.