AI-DIRECTOR Stands for Artificial Intelligence Director
The world lacks leaders as traditional knowledge makes the leaders of no use. The director’s qualification in the companies ACT is legal framework but in real terms, the definition needs to be broad-based. The role of the directors and the board composition will be one of the biggest challenges in the coming days keeping the current scenario. A director and the board of directors plays a pivotal role in the future of an organisation. On what basis an independent, whole-time or part-time director is selected. How does your company select a particular person for the position? Don’t be so quick to shrug off the question. Do we blame the current directors for the fiasco created in Indian corporate and Global economy?
How many of you think that in the coming days Virtual or AI Directors will be ruling the board of directors. I find AIO director to play a strong role in the coming days replacing the current model. The AI-based director will not have limited space and it will be the composition of huge decision trees clubbed together. Well before I get into the topic I need to have deep insight about the reason behind the birth of AI –Directors.
Indian banks and corporates can be one of the best examples where it is being found that the role of Directors and Board needs a complete makeover for Making Indian GDP to become USD 5 trillion economies. Yes, the task of this GDP growth is very much dependent on the Director and Board composition. For this GDP growth, Indian Industry needs visionary director rather than industry veterans.
Corporate faith and trust are built by the Board of Directors will be key deciding factor for the global economy to invest in India and take forward. But my question is direct to the point do we have created that trust or completely shaken up the faith. Without naming any company you can easily make out what I am targeting and want to convey.
Now how the future of the Director’s qualification and board composition will move ahead. The changing times of the global economy demand new qualification for the directors and the board composition.
The part-time director’s concept needs to be abolished. This half-hearted approach cannot be a protective mode of running the board of directors. Independent director’s needs to have a charter of right, which should have legal binding, where in case of any fraud or any act against the interest of the company.
Multiple company director positions is useless unless the said director has a real contribution to the company. Yes, this is another grey and controversial place where the director’s roles will be linked to the company. The engagement of the directors into the business is no longer the only requirement in these changing times. We need directors and board composition where the future is discussed and developed. We need a deep-rooted sustainable business model development and structure created by these directors.
In the coming days Director Appointment strategy would be significantly changed. How do you select a director? This selection of a particular person to be appointed as a director needs a significant thought.
Do we need industry veterans to become directors or new level of qualification is required to be appointed as the director. The director should have a clear vision regarding the changing times and with strong vision beyond current profit and loss. The current performance often is often being the key takeaway for being appointed as a Director.
Past glory often becomes the qualification of being appointed as a Director. Well introduction of AI will bring a quantum jump in the AI-Director role. AI will resolve the history-based process of selection of Director where past glories of business success will be incorporated into a small chip through decision nodes.
So we are not very far from AI based director who will carry the gamut of knowledge of the past process and business success strategies. What about the future? The past have been made powerful but future is not going to be similar like the past in terms of business model etc.
We often find that Board of Directors meeting get closed on papers only. This is key grey area where major key things were skipped and finally the non-performance of business came into existence. Many red alerts are trigger by Auditor but board meeting through paper skips those issues and when they become beyond manageable the organisation gets into collapse. The prefect recipe for an organisation to fail.
Sustainable business model needs a total changeover of the board of directors and its individuality. The qualification of selection needs a significant look. Traditional process kills the Board of Directors operation. The directors have immense power to steer the organisation from the verge of death much before the alarm goes off. We often ask does the Board of directors were sleeping when the various crisis in NBFC and other places erupted. Well this is the place where the alarm goes for the future of Board of Directors.
Failure of an organisation is not a responsibility of the employees but of the board of directors. In the management history we will find numerous cases where Directors and Board composition to be blamed for the failure of the organisation. Its not the sales head or the operation head or department heads due to whom the collapse occurred.
Now a question will come what is the end solution of not having these type of failures to erupt and tarnish the image of the organisation. It is the definition of the qualification and the expectation from an individual for being appointed as director. When the promoters of an organisation have an idea about the type of person to be required for steering the organisation those people will be part of the board of directors. I repeat what I said earlier that Industry visionary is required rather than industry veterans. The scope work of the directors will be exhaustive and beyond traditional practices. The traditional thought process is driven directors will not be able to match the step of future growth.
Technology will change the process of appointment of Directors and its composition. AI based appointment of Directors will now be a part of the organisational culture. Yes, this segment will be a quantum change over where various analytical points will be added up to derive the ideal candidate. The huge quantum of a data will help to process and filter the ideal candidate for the appointment of Director. The history of knowledge will be used into two aspect of AI-one in appointment and second, replacing the Veteran director’s concept with AI –Director. Now a final question do you need part-time directors?