Why Your Board Needs a Technological Stewardship Committee

Forty years ago, was a time well before anyone had ever heard of a Chief Technology Officer or a Chief Information Officer. Picture yourself sitting on the board of a thriving global corporation. How could one possibly imagine what lay ahead? The board of directors' key purpose is to ensure the organization’s prosperity by collectively directing the organization’s affairs while meeting the interests of its shareholders and stakeholders. Today that requires a technological stewardship committee to provide these insights.

Some successful organizations gained a unique competitive advantage by quickly grasping the power of technological breakthroughs. However, many others made nonsensical technology bets. They suffered embarrassing data breaches and watched helplessly as their tech-savvy competitors disrupted their markets.

Technology is how humans adapt their environment to meet their needs or wants. In 2019, blockchain and artificial intelligence (AI) hold the comparable potential to disrupt and reshape the world. Working together, I call them the dynamic duo. AI is already delivering significant impact, more quickly than many anticipated. Moreover, you can say “the full potential of AI will change practically everything” and not be remotely hyperbolic.

Blockchain is starting to make an impact beyond the cryptocurrency world. Blockchain is a “Lurking” disrupter. It offers the potential to streamline transactions and cut costs while catalyzing the transformation toward greater efficiency. Blockchain will do for business what the Internet did for communication.

Your board has a fiduciary duty to proactively consider AI and blockchain’s manifold implications for the future welfare of the organization and its shareholders. That prime duty, combined with the historic portent of AI and blockchain, more than justifies forming a technological stewardship committee without delay.

What is Technological Stewardship?

“Technology challenges us to assert our human values, which means that first of all, we have to figure out what they are.” — Shelley Turkle

The rate of change in technology has passed the rate of change of human adaptability. Just because we can build it does not mean we should make it. Technological stewardship fosters technological innovation and excellence for the benefit of humanity. It is essential to the technical community and professionals everywhere that the contributions of technology improve global conditions.

The chart below by Thomas Friedman suggests that we have reached a point in human evolution where the rate of change of technology has exceeded our ability to adapt — at least in our historically typical manner.

This condition gives rise to what the Engineering Change Lab is suggesting might be humanity’s 21st-century challenge. We see evidence of this challenge everywhere.

"We see vividly — painfully — how technology can harm rather than help. Platforms and algorithms that promised to improve our lives can actually magnify our worst human tendencies." — Tim Cook

How do we ensure we use technology to make the world a better place for all — more equitable, inclusive, just, and sustainable?

Technological stewardship is a new paradigm. It calls on those who create and influence technology to step into a more significant, responsible leadership role.

Embracing this role involves expansion of:

• how leaders see their contribution
• who participates in evolving technology
• the perspectives considered in this evolution

Principles of Technological Stewardship.

“As we’re designing the [technological] system, we’re designing society. Ethical rules that we choose to put in that design [impact the society] … Nothing is self-evident. Everything has to be put out there as something that we think will be a good idea as a component of our society.”—Tim Berners-Lee

What, why, who, and how

What is the purpose of a technological stewardship committee?

The technological stewardship committee is an advisory council with a board-level mandate. It needs to ensure that organization strategy actively anticipates and keeps pace with technological advances and uses them for the good of shareholders, stakeholders, and society. The technological stewardship committee also drives efforts to establish clear and sufficient governance of AI and blockchain development and application. They are responsible for ensuring that AI and blockchain practices are ethically and fiscally responsible.

This committee maintains a holistic and forward-looking view of AI, blockchain and other technologies, encompassing long-term as well as near-term considerations. Its predominant goal is to ensure that shareholders, customers, employees, and overall society benefit as fully as possible from the organization’s expanding embrace of AI and blockchain.

In 2004, I was the registrar and chief executive officer of Professional Engineers Ontario, the entity responsible for regulating Ontario’s 80,000 licensed professional engineers and 5,000 engineering firms.  I launched “engineering governance” — applying the engineering and technology paradigm to governance. On occasion, there are conflicts between financial and technical matters. Moreover, those responsible for engineering may be in an awkward position. On the one hand, they have responsibilities directed toward the company’s financial goals. But on the other hand, there are additional responsibilities they bear as engineers. In many cases, these two sets of duties do not conflict–sound engineering is good business.

We implemented a process to assist companies in recruiting engineers for their boards of directors. The Greater Toronto Airport Authority and the CNR are examples of a couple of organizations that used the service in 2004.  Technology is increasingly complex. So, there is now the need for a board-level committee.

Why does a board need a technological stewardship committee?

AI and blockchain are already opening an array of previously unimagined opportunities for both the use and abuse of technology. Shareholders implicitly rely on the board to ensure that the organization is taking full advantage of the technology, while steadfastly safeguarding against its misuse.

Specific imperatives that merit sustained technological stewardship committee attention include:

Leadership

The technological stewardship committee assesses and drives the development of AI and blockchain acumen and foresight within the board and the executive team.

Competitive advantage

The technological stewardship committee initiates and (with top leadership) shapes strategy for accessing and applying AI and blockchain. They seek to create a competitive advantage. This insight includes identifying the best mechanisms toward that end — i.e., capital investment, M&A, joint ventures, and strategic partnerships.

Risk

The technological stewardship committee anticipates, and proactively safeguards against the significant vulnerabilities that AI and blockchain may create in terms of privacy violations, security breaches, and unintended negative consequences.

A critical risk is AI and blockchain’s tendency to mimic and amplify human bias — for example, automated talent recruiting and screening — which can lead to discrimination litigation as well as inaccurate operating assumptions.

Or consider the suspected cause of two catastrophic Boeing 737 Max 8 aircraft crashes related to technology problems.

What is even more disturbing is that Boeing failed to reveal an issue with the 737 MAX’s alert system for 13 months, according to The Wall Street Journal. In a new statement, the plane manufacturer admits it knew there was a problem with the cockpit safety alert but maintains the software issue “did not adversely impact airplane safety or operation.” Industry experts say Boeing only disclosed some information after the fatal October Lion Air crash, and then waited six weeks following a second deadly incident before disclosing the issue to the public and the FAA. Where was Boeing's Board?

The technological stewardship committee also leads efforts to stay ahead of government regulation. Mainly they assess means of avoiding the types of privacy abuses and data privacy breaches that tend to trigger public outcry and regulatory backlash.

Facebook advised that its U.S. privacy punishment could hit $5 billion. The Federal Trade Commission is investigating reports that the British consulting firm Cambridge Analytica improperly gained access to the private data of tens of millions of Facebook users. This breach occurred seven years after Facebook agreed to improve its privacy practices to settle an earlier dispute with the Federal Trade Commission. Where was Facebook's Board?

Ethics

The technological stewardship committee actively monitors ethical ramifications arising from technology. Moreover, it ensures the board issues appropriate and timely policy guidance. Illustrative considerations include implicit bias, how AI and blockchain could negatively impact current members of the workforce, and “interaction transparency.” This term reflects a person’s right to know when one is interacting with a machine.

Corporate social responsibility

The technological stewardship committee champions new technology initiatives. They seek to supercharge organization efforts to improve societal health, education, sustainability, environmental protection, and other organizational social responsibility priorities.

Who should sit on your technological stewardship committee?

"Diversity of thought refers to a concept that all of us know intuitively and experience throughout our lives." – Deloitte - Diversity’s new frontier

Thought diversity is not a novel or radical idea. It just makes sense in the 21st century as we can now optimize the opportunities found in the intersections among cultures, values, and perspectives. The technological stewardship committee should consider blending sitting directors with expert outsiders. If qualified organization personnel are available, consider including them as advisors. Most importantly, the committee needs to think creatively, expansively, and realistically. It needs to provide the board with insights and expertise across the emerging and maturing technologies, AI and blockchain ethical and social implications, cybersecurity, risk management, and tech-driven mergers and acquisitions.

Regardless of the talent stack (skills, knowledge, wisdom, performance traits, and accomplishments) of the individuals, committee members must demonstrate an ability to look beyond the horizon to foresee not only pending technological innovations but their implications as well.

We offer a performance trait-based selection process for board members and committee members. We have benchmarked the traits of high-performers as directors and as technological stewards and compare these results with possible candidates.

How do you establish a technological stewardship committee?

I know of no board-level committee that

1. focuses on the strategic ramifications of technology
2. tackles the full range of responsibilities described above

For example, Google’s ill-fated Artificial Intelligence Ethics Board was not explicitly a board body. It had a narrow mandate: “to audit Google’s ethical standings when it comes to machine learning and AI and blockchain products.”

In contrast, the envisioned technological stewardship committee is part of the board, has an overall mission, and is more clearly business oriented. While ethics falls within its purview, the technological stewardship committee is not an ethics board. In short, this is uncharted territory.

Building a technological stewardship committee

While there are no explicit models to emulate, Google’s experience illustrates the need for your board to carefully and purposefully shape its strategic response to AI and blockchain and technology initiatives.

Here is how to proceed:

Make the technological stewardship committee integral to the work of your board

The technological stewardship committee should only pursue missions explicitly owned by the board. Further, it is best if the recommendations and actions are carefully woven into the overall organization strategy and your board’s ongoing organization oversight. The role of the technological stewardship committee is not to relieve the board of responsibility for staying ahead of AI and blockchain disruption. Instead, it is to accelerate and enhance the board’s effectiveness in fulfilling that responsibility.

Avoid grandstanding

Convey to employees, shareholders, investors, customers, and others that forming a technological stewardship committee is a responsible and necessary thing to do. Nothing more and nothing less. Avoid communications that others may misinterpret as hype or shallowly jumping on a trend. It would be best if you made it meaningful.

Continue to delegate appropriately

The technological stewardship committee must work only at the board level while overseeing the relevant work (e.g., execution of an AI and blockchain talent strategy) of the organization’s leaders and functions. This committee needs the same stature at the board as the most prominent committees, i.e.,  finance, compensation, and governance.

Pursue tangible business outcomes

The effectiveness of the technological stewardship committee must be gauged, above all, by its contributions to safeguarding and building shareholder value.

Concluding Thoughts

Once it was easy for boards to believe technological advances were of only marginal importance to their organizations. Today, many boards assume that AI and blockchain is an immediate and urgent strategic concern only for tech organizations. History suggests otherwise. The dynamic duo of AI and blockchain is a game changer — not just for tech organizations but for everyone. Emerging technologies are a way of life. That is why your board needs a technological stewardship committee. Moreover, carefully select its members.