Reimagining the 21st Century Enterprise Board of Directors

In the rapidly evolving landscape of 21st-century business, corporate boards stand at a critical crossroads. The traditional board structure and composition may be challenged to navigate the complex technological transformations reshaping global enterprises. The need to better translate technological potential into strategic advantage and to comprehend the ethical and operational implications of generative technologies is at the heart of the challenge, complicated by an ever- compressing rate of change. This rate change, or “clock speed,” has compressed from a 150 +/- years in the industrial revolution to barely decades with recent transformative technologies such as the internet and cloud computing.

Generative artificial intelligence (AI) represents the latest – and perhaps the most disruptive – wave of technological transformation, promising to fundamentally reconstruct how businesses operate, innovate, and compete. Unlike previous technological advancements, such as the internet, cloud computing, and quantum computing, generative AI has the potential to significantly impact human productivity. Consider current projections for generative AI:

• Global market size is projected to reach $62.72 billion in 2025, with the U.S. being the largest market at $20.3 billion.
• The market size is expected to show an annual growth rate (CAGR 2025-2030) of 41.52%, resulting in a market volume of $356.5 billion by 2030.
• More than 80% of enterprises expected to deploy generative AI applications by 2026.
• Goldman Sachs research suggests generative AI could raise global GDP by 7% over a 10- year period following widespread adoption.

These statistics are being driven by AI’s business impacts in content generation, data analysis, workflow (code) creation, process standardization, and ultra-personalized service delivery. These are not mere incremental impacts – they represent a fundamental restructuring of business capabilities, models, and strategic potential. Incumbent organizations must act quickly to compete with the rapidly growing landscape of startups and more mature market entrants capturing share within and across traditional industry boundaries.

The board structure and composition must evolve at or ahead of the speed of change to remain relevant. Existing board committees need to understand how AI will impact their work. For example, audit committees need to understand what new types of financial risk are introduced when AI systems manage transactions or forecasting. New committees to oversee the impacts of digital transformation and organizational disruption, such as technology and culture, may be necessary. Additionally, interdependence created by AI’s impacts may challenge distinct committee responsibilities. AI data governance, for example, spans audit, technology, legal and risk domains. AI-led and/or AI-enabled decision-making in the business should compel board members to understand how algorithms work and what guardrails are necessary to keep them aligned with their intended design.

Ironically, it is generative AI itself that may prove valuable to transformational challenges for boards. Generative AI’s ability to work with board members to ingest and assess copious amounts of meeting pre-read and other sources of data (public and company proprietary) may help board members dramatically shorten their preparation time. That contextual acceleration may help unlock rich human creativity inherent in good board members. It may also give directors a springboard of practical use that can help them reimagine strategic potential and be better prepared to oversee their company’s generative AI evolution.

Sources: Statista Market Insights; Gartner, 2024; Goldman Sachs, 2023.

**Steve Hill has more than 38 years of experience in technology-enabled change and business transformations. He is known for driving sustainable and profitable growth through industry-leading innovation and strategic investments. Steve was the very first Vice Chairman for Innovation & Investments at KPMG and across the entire Big Four.  Following his role as Global Head of Innovation, Steve recently retired from KPMG with his most recent position as Regional Advisory Leader, One Americas. He is now focused on bringing his expertise in innovation, investments, digital transformation, cyber and generative Ai in service to corporate boards of directors.