Will board directors need to get used to the idea of having robots as colleagues in the boardroom? It’s a scenario that may not be too farfetched, according to Dr Megan Clark AC FAICD, head of the Australian Space Agency, and a director of Rio Tinto and CSL.
At Woodside, where they are exploring non-human workers in a number of ways at their laboratory in Perth, it is commonplace to see robots in the workplace, she said at a recent AICD event.
“Take the example of Woodside. One of the things they wanted to do was to make sure that people get used to having robots around. They are trialling robots in the corridors, so everyone gets used to seeing them as colleagues. One of the really exciting things was organising a meeting with a robot on one of the oil platforms as a colleague.”
Far away from Earth, in space, robots are also in common use. Researchers at the Australian Centre for Robotic Vision, headquartered at the Queensland University of Technology are working on “pick and place” robots for unpacking objects 1 . This is the kind of technology that will be needed in space when service vehicles arrive at the International Space Station or the Lunar Gateway. It would be great to see Australian robot power being used to help unpack the vehicle and put everything away.
Woodside and the Australian Space Agency last year announced a collaboration to promote technology transfer between the space sector and the oil and gas sector.
“So the idea of a robot as a colleague, and as a part of your team that you can task and work with is becoming the norm and we'll certainly see that in the workplace.”
“COVID-19 catapulted us into [a] future that was already coming. That is a significant trend for boards to continue to look at. Just how fast we accelerated, and how we can look forward and make sure we keep ahead of that trend,” she said.
Clark was speaking at an AICD virtual event ‘Global Boards in a New World’ in October. Along with her fellow speakers, Clark pointed to a number of changes and advances on the technology front that board directors need to be aware of.
1. Explore partnering and collaboration
Partnering and collaboration had been a major focus this year on the scientific front in Australia, according to Clark.
“I'm lucky enough to work with CSL, which is a blood plasma and vaccine company… a significant global player. And what was extraordinary about the resilience of the company was its ability to pivot when COVID-19 hit. It was not just that the team delivered everything they said they would do on the business, but that they pivoted to establish partnerships for vaccines with the University of Queensland and also AstraZeneca.
“What really hit me at the board level when those early discussions were going on, was the fact it was all on goodwill. There were no contracts signed at that point. It was like, we'll get to that, but right now we need to move fast. So that resilience informed the collaboration, the entrepreneurship, and the willingness to do things differently. You know, who would have dreamed of commencing development of a vaccine while the commercial aspects were still be ironed out, but the relationships mattered there.”
In September this year, CSL Limited signed a Heads of Agreement with the Australian Government to supply 51 million doses of the University of Queensland’s COVID-19 vaccine and a separate Heads of Agreement with AstraZeneca to manufacture the Oxford University product, should clinical trials of both prove successful.
2. Get board advice from digital experts
Singapore-based PwC Digital Innovation Leader Carolyn Chin-Parry MAICD, who sits on the boards of Singaporean charity Equal and the International Advisory Board of the AICD, told attendees that obtaining the right advice in the digital space is now paramount due to digital acceleration.
Chin-Parry, who was last year voted IT Woman of the Year and who is also vice-chair of the Digital Industry Committee at AustCham Singapore, said “I do feel that you do need to get advice on a lot of how things work in the digital space. So you need the right advice around data governance, AI, ethics and cyber security. We have seen many examples around the world where your share value can be wiped out by billions overnight due to online incidents.
“So on that basis, I would say that relying on just your CIO or CTO, in my mind is not enough. The reason is that you can't rely on one person and the same team. I think it's always very important to seek an outside perspective. Setting up a digital advisory committee made up of experts from different digital domains is important.”
It is also advisable to go beyond an IT audit and include a cyber audit as well, and to conduct penetration and stress testing, in order to track how the business and related systems are performing. Concerns around data governance and privacy must be addressed, “because the chances are lots of companies are operating outside of their own jurisdiction and hold data from overseas customers”, said Chin-Parry.
3. Meet increasing demand for specialist skills
“Increasingly board members need to become superhuman, to be very blunt,” RAK Bank CEO Peter England MAICD, said at the event. On one hand, boards need to have good generalists as members, but specialist expertise is also vital, he said.
England, who is based in Dubai and is also a board member of RAK Insurance, said “I think this specialist part is going to become increasingly important.” This is especially the case in his field of financial services in areas such as anti-money laundering compliance, interest rate risk, credit risk and customer advocacy.
“It's now about finding people that not only have the general skills, but who can be supplemented with people who have very specialist experience.”
Boards may need to consider appointing advisors to committees, for example board risk committees in banks. “In certain areas of any board, you're going to need that special skill and I think this is going to be really crucial for board nomination and remuneration committees and for those who chair people boards to really understand the need to get that level of skill and expertise that maybe wasn't required five or 10 years ago.”
Globally and in Australia, there have been a number of examples of penalties for breaches and sanctions imposed, especially in financial services. “It's no excuse anymore to say hey, at board level we leave these complex matters to management.”
4. Undertake virtual site visits and mentoring
Site visits are one of the most important things that boards do, to look at the culture and examine the talent in the organisation at all levels, said Clark. Now they are turning virtual.
“CSL takes a whole week in the calendar to do that and in this virtual world, with all of the restrictions that we have on travel, we will need to conduct those site visits virtually. Rio Tinto has already started virtual site visits this year.”
With the Bank of America advisory board, on which Clark sits, a form of virtual mentoring is taking place, but more needs to be done. “Often we can bring a young person as a “shadow” or mentee into the advisory meetings, with permission from everyone. This allows the emerging leaders to understand the context and see how the leaders take on and provide feedback.”
Younger people who have just joined the organisation benefit from this kind of interaction with different seniority levels, she said. “One mentee commented, after observing at that level, that it was the first time they had seen the broader context of the business and they thought it was fantastic.”
5. Use big data, small data and gut feel
Sounding a cautionary note on the over-reliance on data, Chin-Parry said that a combination of elements in board strategy is important and that retaining the human element is vital. “A combination of small data and big data, but also gut feeling, is really important,” she said.
Small data incorporates interactions with real end customers, and companies such as Lego have used this to great advantage.
“If you do collect quality data, it can help with decision making,” she said. It can be used for predictive analytics that will give an idea of what’s to come.
Chin-Parry says directors need to understand that they do not need to be technology experts, but they should read as widely as possible in order to be able to ask the right questions. “You need to ask how does this technology work and what does this mean for my business model?
“What does it mean if my competitors actually started using this? What does it mean in terms of service but also the missed opportunities I haven't considered? I do not expect any board director to be a digital expert. I do believe, however, that you should be open enough to read as much as you can and learn as much as you can.”
Holistic decision-making takes place when data is taken into account in the context of a number of other factors, she adds. “So this is data that's given to me by this AI machine for example. But what am I seeing in the industry, what am I seeing internationally, what am I seeing locally? You need to take in other data points to help give you a more holistic viewpoint, before you make a decision that is really important.”
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