What's Happening?
Corporate boards are increasingly focusing on geopolitical risks and the transformative impact of artificial intelligence (AI) on business strategies. According to John Rodi, partner and co-leader of KPMG’s Board Leadership Center, the complexity of global political issues, including tariffs and conflicts like the situation in Ukraine, are reshaping corporate strategies. Boards are expanding their expertise to include fields such as labor, energy, and water, which are affected by geopolitical dynamics and AI advancements. The emergence of agentic AI, capable of performing complex tasks with minimal supervision, is identified as a significant disruptor. Boards are advised to challenge their companies' AI strategies to ensure they are prepared for these changes.
Why It's Important?
The focus on geopolitical risks and AI by corporate boards is crucial as these factors can significantly impact business operations and strategies. Companies that fail to adapt to these changes may face challenges in maintaining competitiveness and operational efficiency. The integration of AI into business processes offers opportunities for enhanced customer interaction and operational improvements, but it also requires careful strategic planning to avoid potential pitfalls. Understanding and preparing for geopolitical shifts and AI disruptions can help companies navigate uncertainties and leverage AI for long-term success.
What's Next?
Boards are expected to continue expanding their purview to include more diverse expertise and proactive strategies. This may involve bringing in independent experts to provide insights and conducting mock scenarios to prepare for unexpected geopolitical and technological changes. Companies will likely need to refine their AI strategies to ensure they are not only focused on efficiency but also on creating meaningful customer interactions and adapting to global changes.
