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Good morning. Board directors say artificial intelligence is transforming business faster than any technology they’ve seen, but consensus on how to steer the board through these times remains elusive. How fast? Some companies are already beginning to see a return on AI agents. More on that below.
We caught a glimpse of the challenge Tuesday at the WSJ Leadership Institute’s inaugural Board of Directors Council Summit in Palm Beach, Fla. where board members from some of America’s largest corporations discussed how best to lead with authority in a time where traditional processes are being disrupted.
Some called for “ruthless” internal change and open argument. Others urged caution and measured adoption. Below, some highlights:
Large companies are under threat like never before, said Dan Schulman, chief executive of Verizon Communications and a board director at Cisco Systems and Lazard.
"We're going to go into a world of change right now, and we're going to have new competition coming who are not afraid to utilize the technologies. It costs fractions of what it used to to start companies. You'll have. companies with 100 people that will be doing multiple billions of dollars of revenues easily."
And the nature of the board itself needs to change to meet the challenge. Companies, and the boardroom, need to become more “argumentative” to keep pace with external disruption, said Schulman.
"We can't steer the boat by the wake of the boat anymore because that is probably the biggest impediment to future success. So I think all forms of the culture within a boardroom need to change in these next five years because these next five years are going to be like nothing we have seen before."
Carolyn Everson, a director at Coca-Cola, sportswear company Under Armour and Walt Disney and a senior adviser at private-equity firm Permira, agreed, saying “a sense of urgency” is a necessity in the age of AI, along with “being completely dissatisfied with status quo and complacency.”
"I think you have to push and boards have to understand, in my view, that there are going to be pretty big decisions that are going to feel very risky."
But moderate accordingly, suggested Alex Gorsky, a director at JPMorgan Chase, Apple and International Business Machines and former chairman and CEO of Johnson & Johnson. Sometimes the board’s role is to slow down a company that might be putting itself in risky territory by moving too fast with particular use.
"Overall, we need to move faster, but it needs to be thoughtful [about] exactly where, when and how that’s being done... Be careful about not being swayed by the crisis du jour…this is a long arc."
Boards need to address the fear and lack of confidence inside the organization as it relates to AI. That issue can be handled by helping the organization understand that AI can create that trifecta of “faster, better, cheaper” but also that it can contribute to top-line growth as well as bottom- line efficiencies, said Ellen Kullman, a director at biotech Amgen, Carbon, Goldman Sachs and former chair and CEO of DuPont.
"You’re not really going to get credit for it in Wall Street unless they think it’s going to move your top line."
And of course, everything needs to move faster. "Most big companies think about how do you become 10% more successful next year, and how do we drive EPS up 10%," said Schulman. "But I think instead of 10%, you have to think about 10x. Like how do we improve things by 10x? How do we do things 10x faster?"
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