The following is an excerpt from our Navigating and Looking Ahead in Times of Crisis: Questions for the (hybrid) Boardroom publication, which gives directors and corporate leaders valuable insight into key risk management considerations. Read the full publication.
New disruptive technologies are emerging at a breakneck pace and transforming nearly every aspect of the business landscape. Accordingly, when a crisis emerges, technology is often at the forefront of the response strategy from directors and corporate leaders.
This article, while not meant to be exhaustive, is a sample of key technology-related risk management considerations.
Innovation And Capital Allocation
Investment in innovation and intangibles is something companies need to focus on more than ever before:
- How important is innovation to our business and long-term survival (both for our processes and our products)?
- Are we spending enough on R&D and how do we compare to our competitors?
- Are we or some of our products at risk of becoming obsolete or socially unacceptable?
- Are we making the right capital allocation (both human and financial) decisions to support innovation?
- Is management properly distinguishing (for management and not for financial reporting purposes) between expense and investment?
- Are we taking advantage of the many programs that governments are offering as incentives to innovate?
Digital Presence, Technology Capabilities And Artificial Intelligence
Any organization handling data and AI will be dealing with new and constraining regulations on privacy and data transfer.
- Do we have adequate cybersecurity measures in place to protect the company, employees and customers?
- When is the last time we performed a robust cybersecurity audit? When is the next update?
- Have we anticipated and are we prepared to be compliant with the upcoming privacy & personal data regulations applicable to our business?
- Have we considered how artificial intelligence is likely to affect our business? Have we identified opportunities or risks related to the use of artificial intelligence for our operations? What are our competitors doing with regard to artificial intelligence, ChatGPT, blockchain or similarly disruptive technologies?
- Do we have the right skills and people to address the opportunities and risks related to the foregoing?
- Do we need to implement a governance and ethical framework as we deploy our artificial intelligence strategy? What systems and processes must be in place to support effective board education, monitoring, risk management, and adherence to regulatory requirements?
As businesses leverage the transformative power of technologies like AI, risks will inevitably emerge. And with the regulatory framework governing the responsible use of AI not yet caught up to the rapidly evolving technology, it’s critical for directors and corporate leaders to have a robust strategy in place in case a crisis emerges. Having a thorough understanding of these risks and considerations will help set up your organization for long-term success.