Changing Governance in the new age

Machine learning combining with big data to solve complex problems, technologies augmenting human intelligence, and robot directors on boards: the time to talk about artificial intelligence is now.

Forbes predicts that in 2018 “smart automation will deliver the most immediate results to organisations”, both from technology and non-technology sectors. While in the past AI has been used mostly to support decision-making in business, we are seeing a shift in systems becoming self-teaching, allowing them to make decisions without human intervention.

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In October 2017, Saudi Arabia made headlines around the world as the first country to grant citizenship to a robot. Sophia the robot was created by Hong Kong-based Hanson Robotics and was designed around human values. Sophia announced her new citizenship at the Future Investment Initiative Conference in Riyadh, a conference outlining plans to transform the country into an innovative nation. The conference also unveiled ‘NEOM’, a new urban ecosystem in Saudi Arabia that will operate as an independent economic zone and pioneer developments across energy and water, biotech, advanced manufacturing, technological and digital sciences, and more.

AI is even entering the boardroom, albeit at a slower pace than other AI technologies. Hong Kong-based Deep Knowledge Ventures was the first company to have an AI director on its board, Vital, the robo-director that participates in an observer role but is involved in all investment decisions. Vital assesses risk factors and has more than 50 parameters that help predict the risk of failure in the field of biotechnology. And the technology will only improve, with the company working on Vital 2.0, a system that will have a higher IQ than the original and the ability to integrate data from a number of external sources.

The United Arab Emirates is embracing AI and using it to lay a solid base for the future. The UAE sees AI as a valuable tool in solving global issues, rather than posing a threat to the workforce as is often feared. The UAE Centennial 2071 project includes the UAE Strategy for Artificial Intelligence, outlining benefits such as boosts to education, minimisation of chronic diseases and raises to the percentage of production and communication effectiveness. The Strategy talks of “disrupting the government to explore future risks, refine future strategies, and invent future opportunities.” It aims to boost the UAE’s GDP by 35% and reduce government costs by 50%, figures that will position the UAE as future-focused and innovative.

Singapore has also embraced AI technologies, announcing plans to launch the world’s largest AI hub in 2018. The hub will be run by private investment firm Marvelstone, which plans to incubate 100 start-ups per year and build intellectual property in the area of AI. Tech giant Alibaba is also launching an AI research facility in Singapore in 2018, part of a US$20 billion global research programme to develop new AI technology.

With the advancement of AI comes a need for greater ethics and risk assessment by organisations who wish to implement AI in their business. The World Economic Forum in 2016 highlighted that AI technology is susceptible to cyber hacking, can contain bias and lack neutrality towards content and can have a lack of understanding of business contexts. Ethical issues arise from the amount and nature of the data that is mined, through to what legal rights machines have.

Boards need to ensure their directors are knowledgeable about the opportunities and risks surrounding AI, including the impact on their organisational strategy and customer base. As AI is concerned with data – one of a company’s most important assets – directors must understand all aspects of their data before deciding which AI technologies to implement. 2018 is the year companies and boards need to start having conversations about creating an integrated AI architecture strategy.