scholarly journals New risks related to emerging technologies and reputation for corporate governance

2020 ◽  
Vol 9 (2) ◽  
pp. 64-74
Author(s):  
Hugh Grove ◽  
Mac Clouse ◽  
Tracy Xu
Keyword(s):  
Artificial Intelligence ◽  
Corporate Governance ◽  
Boards Of Directors ◽  
Emerging Technologies ◽  
Research Question ◽  
World Intellectual Property Organization ◽  
Global Marketplace ◽  
Challenges And Opportunities ◽  
Potential Risks ◽  
Management Issues

Artificial intelligence (AI) has moved from theory into the global marketplace. The United Nations World Intellectual Property Organization released the first report of its Technology Trends series on January 31, 2019. It considered more than 340,000 AI-related patent applications over the last 70 years. 50 percent of all AI patents have been published in just the last five years. The challenges, potential risks, and opportunities for business and corporate governance from emerging technologies, especially artificial intelligence, have been summarized as whereby machines and software can analyze, optimize, prophesize, customize, digitize and automate just about any job in every industry. Boards of directors and executives need to recognize and understand the new risks associated with these emerging technologies and related reputational risks. The major research question of this paper is how boards of directors and executives can deal with both risk challenges and opportunities to strengthen corporate governance. Accordingly, the following sections of this paper discuss key risk management issues: deep shift risks, global risks, digital risks and opportunities, AI initiatives risks, business risks from millennials, business reputational risks, and conclusions.

scholarly journals Monitoring AI progress for corporate governance

2020 ◽  
Vol 9 (1) ◽  
pp. 8-17
Author(s):  
Hugh Grove ◽  
Mac Clouse ◽  
Laura Schaffner ◽  
Tracy Xu
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Global Economy ◽  
Research Question ◽  
Work Force ◽  
Quantum Computers ◽  
Main Research ◽  
Challenges And Opportunities ◽  
High Degree ◽  
Rapid Transformation

Artificial Intelligence technologies are predicted to contribute up to $16 trillion to the global economy by 2030. This rapid increase in AI development will have tremendous significance for all the major players for effective corporate governance and national leadership: boards of directors, owners, regulators, legislators, and the national public interest. While AI is believed to increase both the productivity and competitive advantage, it will lead to rapid transformation in the work force and evolve with a high degree of uncertainty. To facilitate the survival of public and other corporations and entities, all these major players should closely monitor the progress and pay attention to major trends in AI. The main research question of this paper is what are the key threats, challenges, and opportunities of AI. Major threats are the replacement of human activity with AI activity, which may not be able to be controlled by humans. Such control is a major challenge concerning AI as is the control and opportunity of human-AI partnerships. Digital dashboards and quantum computers are also part of all these challenges and opportunities. Accordingly, the paper studies the following AI topics currently being explored in the AI literature: key questions and issues for AI, monitoring trends in AI development, digital board audits for AI action plans, AI robotic process automation, and quantum computers with AI implications, AI progress assessment and conclusions.

scholarly journals Corporate governance for trillion dollar opportunities

2017 ◽  
Vol 13 (3) ◽  
pp. 19-27 ◽  
Author(s):  
Hugh Grove ◽  
Maclyn Clouse
Keyword(s):  
Artificial Intelligence ◽  
Corporate Governance ◽  
Big Data ◽  
Boards Of Directors ◽  
Industry 4.0 ◽  
The Internet ◽  
Technological Changes ◽  
Corporate Executives ◽  
Challenges And Opportunities ◽  
The Internet Of Things

Boards of Directors will have to play a key role in the technological survival and development of companies by asking corporate executives about their plans and strategies for these emerging technological changes and challenges. Key challenges and opportunities discussed in this paper, with corresponding corporate governance implications, included Big Data, Artificial Intelligence (AI) with Industry 4.0, AI with the Internet of Things (IoT), Deep Learning, and Neural Networks. Survival should not be the goal, but it may be the necessary first step for today’s companies. Potential winners seizing these trillion dollar opportunities will be company executives and Boards of Directors who can incorporate these technological changes into specific new business models, strategies, and practices. While the awareness on boards regarding risks originating from disruptive innovation, cyber threats and privacy risks has been increasing, Boards of Directors must equally be able to challenge executives and identify opportunities and threats for their companies. This shift for companies is not only about digital technology but also cultural. How can people be managed when digital, virtual ways of working are increasing? What do robotics and Big Data analysis mean for managing people? One way to accelerate the digital learning process has been advocated: the use of digital apprentices for boards. For example, Board Apprentice, a non-profit organization, has already placed digital apprentices on boards for a year-long period (which helps to educate both apprentices and boards) in five different countries. Additional plans and strategies are needed in this age of digitalization and lifelong learning. For example, cybersecurity risks are magnified by all these new technology trends, such as Big Data, AI, Industry 4.0, and IoT. Accordingly, the main findings of this paper are analysing the challenges and opportunities for corporate executives, Boards of Directors, and related corporate governance concerning the driving force of Big Data, Artificial Intelligence with Industry 4.0, Artificial Intelligence with the Internet of Things, Deep Learning, and Neural Networks.

scholarly journals Evolution of corporate governance towards intrinsic value

2019 ◽  
Vol 1 (1) ◽  
pp. 8-15 ◽  
Author(s):  
Hugh Grove ◽  
James C. Lockhart
Keyword(s):  
Corporate Governance ◽  
Boards Of Directors ◽  
Intrinsic Value ◽  
Research Question ◽  
Three Dimensional ◽  
Success Factor ◽  
Company Stock ◽  
Corporate Executives ◽  
Legal Personhood ◽  
Challenges And Opportunities

The major research question addressed by this paper is how to evolve corporate governance beyond its traditional shareholder focus towards the broader perspective of a stakeholder focus with intrinsic value. Intrinsic value refers to the monetary value of a company, stock, currency, or product determined by fundamental analysis, without reference to extant market value. It is ordinarily calculated by summing the discounted future income generated by the company, stock, currency or product to obtain its present value. In this paper we observe the evolution of corporate governance towards an intrinsic, long-term value focus by the boards of directors, corporate executives, owners and shareholders, regulators and legislators, and other stakeholders. These major players are encouraged to develop more wisdom in order to assess the emerging threats, challenges, and opportunities from technology for intrinsic value, especially with the perspective of the public corporation as a separate legal personhood, as advocated by the European Parliament’s Committee on Legal Affairs in 2015. The rapid increase in the development of artificial intelligence (AI) and other technologies has tremendous significance for these major players broadly contributing to effective corporate governance. To facilitate the development and evolution of intrinsic value for public corporations and other entities, these major players need wisdom for more effective corporate governance in challenging times. Accordingly, this paper discusses the evolution of corporate governance and board members’ perspectives from a shareholder focus to a stakeholder focus with intrinsic value; the key success factor being wisdom for boards; the three-dimensional wisdom scale; and, the AI challenge, including the “Deadly Soul” of a new machine, to the wisdom of company executives and their boards of directors.

scholarly journals Climate change risk: Challenge for corporate governance

2021 ◽  
Vol 10 (2, special issue) ◽  
pp. 258-268
Author(s):  
Hugh Grove ◽  
Maclyn Clouse ◽  
Tracy Xu
Keyword(s):  
Climate Change ◽  
Corporate Governance ◽  
Global Climate Change ◽  
Boards Of Directors ◽  
Global Climate ◽  
Research Question ◽  
Empirical Studies ◽  
Future Research ◽  
Climate Change Risk ◽  
Climate Change Risks

The major research question of this paper is to analyze climate change risk as a challenge to corporate governance. Climate action failure was the environmental risk most frequently listed in the top ten country risks. It also becomes a major reason that many companies are taking their own initiatives on climate change action which poses an imminent challenge for corporate governance as boards of directors track and assess such initiatives by their own companies. Boards can play a key role in guiding their organizations into the next new normal in the wake of global pandemic, economic disruptions, and ongoing climate change problems. This paper identifies and studies the corporate governance risks and opportunities related to global climate change risk and provides recommendations to boards of directors. The major sections of this paper are global climate change risks, corporate climate change pledges, climate-related financial disclosures, major topics in the Global Climate Change report, whether companies are ready to manage major climate change risks and opportunities, climate-related investment benchmarks, and conclusions. Future research could investigate this climate change risk challenge with case studies or empirical studies.

scholarly journals Long-term stockholder and stakeholder value and corporate governance implications

2020 ◽  
Vol 2 (1) ◽  
pp. 18-26 ◽  
Author(s):  
Hugh Grove ◽  
Mac Clouse ◽  
Tracy Xu
Keyword(s):  
Corporate Governance ◽  
Business Strategy ◽  
Boards Of Directors ◽  
Research Question ◽  
Initial Step ◽  
Vital Role ◽  
Clear Understanding ◽  
Sustainable Value ◽  
Key Indicators

The key research question of this paper is to explore the major implications for corporate governance from the emergence of long-term stockholder and stakeholder value perspectives for the purpose of a corporation. The major implication for corporate governance is the significant opportunity for boards of directors to play a vital role in helping companies create long-term sustainable value. An initial step is to develop a clear understanding of the company’s business strategy and how long-term value is created through innovation and deployment of resources. Boards of directors need to understand what really creates long-term value in their companies and then make sure their companies develop ways to measure and manage such value in order to be able to “govern like owners” and fulfill their fiduciary roles. To facilitate this fiduciary role, McKinsey & Company’s Corporate Horizon Index with its five key indicators, investment, earnings quality, margin growth, quarterly management, and earnings-per-share growth, and their related hypotheses and measurement approaches can be used as a roadmap.

scholarly journals What Impact does Artificial Intelligence have on Corporate Governance?

2020 ◽  
Vol 14 (4) ◽  
pp. 19-30
Author(s):  
Ilya Ivaninskiy ◽  
Irina Ivashkovskaya
Keyword(s):  
Artificial Intelligence ◽  
Corporate Governance ◽  
Boards Of Directors ◽  
Positive Impact ◽  
Digital Technologies ◽  
Agency Cost ◽  
Future Research ◽  
Practical Implementation ◽  
Open Questions ◽  
Sources Of Authority

In recent years, the topic of ‘digital transformation’ has become a primary focus in the areas of business and research. Among digital technologies, the area attracting the most investment is artificial intelligence (AI). Research shows that AI can benefit corporate governance in a variety of ways. In this article, we identify two academic streams on the topic and evaluate the existing literature. The first stream analyses AI-driven improvements in governance mechanisms such as boards of directors (BoD). The second stream explores the digital-driven organisational changes and broad governance adaptations necessary for AI improvements. We evaluate the evidence for AI implementation in improving and evolving traditional aspects of corporate governance. The examined authors argue that digital technologies transform the nature of a firm, making it less based on traditional sources of authority. There is consensus that this environment calls for fundamental reconsideration of corporate governance and for the revision of regulatory models, moving towards decentralisation. Specific areas examined in these contexts include jobs automation, agency conflict, auditing processes, the selection of BoD members, compliance functions, data analytics, and capital allocation.The examined research indicates that AI improves corporate governance and lowers agency cost by automating decision making using real-time big data analysis. However, while researchers propose multiple novel approaches to governance, practical implementation of those approaches or an empirical analysis of the results of such experiments is yet to occur. Despite the consensus among researchers on the positive impact of AI for governance and implementations as making AI a part of BoD, open questions and skepticism persist. This is indicative of the immaturity of AI as a technology in terms of development and implementation, and as such there is ample scope for future research. We propose multiple areas within this article where opportunities exist for further insight within this burgeoning field.

scholarly journals Editorial: Challenges and opportunities in corporate governance and regulation for a new decade

2020 ◽  
Vol 9 (1) ◽  
pp. 4-6
Author(s):  
Lozano-Vivas Ana ◽  
Braendle Udo
Keyword(s):  
Artificial Intelligence ◽  
Corporate Governance ◽  
Fiscal Policy ◽  
Governance Structure ◽  
Joint Effect ◽  
Emerging Countries ◽  
Asia Pacific ◽  
Corporate Governance Structure ◽  
Fiscal Rule ◽  
Challenges And Opportunities

The first issue of 2020 is composed by five papers addressing interesting topics attempting to highlight the corporate governance ability needed to face the rapid increase of using artificial intelligence (AI) in some business; the influence of corporate governance on Asian firm performance; the joint effect of fiscal rule and corporate governance on explaining the procyclicality of fiscal policy on Asia-Pacific development and emerging countries; and whether the increase in institutional investors has encouraged investee companies to establish better corporate governance structure.

How Do We Optimize Risk in Enterprise Architecture when Deploying Emerging Technologies?

2021 ◽  
Vol 3 (1) ◽  
pp. 3-13
Author(s):  
Charla Griffy-Brown ◽  
Mark Chun ◽  
Howard Miller ◽  
Demetrios Lazarikos
Keyword(s):  
Boards Of Directors ◽  
Enterprise Architecture ◽  
Emerging Technologies ◽  
Research Question ◽  
Cyber Physical Systems ◽  
Leadership Teams ◽  
Business Leaders ◽  
Physical Systems ◽  
Physical Risk ◽  
Cyber Risk

Emerging Technologies which merge cyber-physical systems continue to transform businesses and digital agility in transformative ways. Importantly, most investigations around focus on either cyber risk or the risk around physical systems but it does not encompass both. However, the immediate challenge is new opportunities occurring with emerging technologies. Examples include automobiles, the Internet of Things (IoT), medical devices, and building controls. In this study we will focus identifying risk as an optimization not a minimization problem and how to develop a practical approach for executives and boards to use in the oversight of cyber physical systems. Based on interviews with executive leadership teams and boards of directors we explored the over-arching research question: How can we apply a risk-based approach to cyber-physical security and what questions should business leaders be asking? The research methodology used a survey instrument and multiple qualitative methods involving business leaders from 60 companies and 80 business leaders from September 2018 – September 2019. Based on this analysis, we developed an extended framework for executives, as well as questions and process for boards to consider as part of their oversight. The Extended Risk-Based Approach equips boards and executives as they begin to develop their thinking around enterprise cyber physical risk.

scholarly journals Activist investors and implications for corporate governance: A case study of Barington Capital Group and L Brands

2019 ◽  
Vol 15 (2) ◽  
pp. 28-36 ◽  
Author(s):  
Hugh Grove ◽  
Mac Clouse
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Boards Of Directors ◽  
Financial Analysis ◽  
Research Question ◽  
Public Information ◽  
Corporate Executives ◽  
Governance Analysis ◽  
Public Offering

The key research question of this paper is to explore the implications for both financial and corporate governance performances from the emergence of activist investors. This paper uses a dramatic case study of one specific activist investor’s role, Barington Capital Group, in analyzing the performance of a public company, L Brands, which lost $20 billion in market capitalization in the last three years while the U.S. stock market was going up significantly. In conclusion, this activist investor’s approach and recommendations in this case study could be used as operational guidelines by boards of directors and corporate executives for improving both their financial and corporate governance performances. From its financial analysis, Barington recommended either an initial public offering of the superior performing Bath & Body Works brand or a spinoff of the weak performing Victoria’s Secret brand. From its corporate governance analysis, Barington recommended that L Brands improve the composition of its board of directors whose deficiencies in director independence, industry experience, and diversity have hindered its ability to effectively oversee and advise management. Accordingly, the major sections of this paper are financial analysis, operational zeitgeist brand analysis, and corporate governance analysis. It is important to note that this paper was prepared exclusively with public information.

THE EFFECT OF CORPORATE GOVERNANCE AND CORPORATE CULTURE ON FIRM MARKET VALUE TO IMPROVE FINANCIAL PERFORMANCE

2020 ◽  
Vol 1 (6) ◽  
pp. 930-940
Author(s):  
Fathiyah Fathiyah ◽  
Mufidah Mufidah
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Corporate Culture ◽  
Boards Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Descriptive Analysis ◽  
Market Value ◽  
Company Performance ◽  
Financial Company

The purpose of this research is to analyze the effect of corporate governance and corporate culture  on firm market value to improve financial performance. Corporate governance  is measured by audit  committee,boards of directors, board meeting and nomination . Corporate culture is measured by Corporate culture promotion While financial  company performance is measured by return on assets.  This research was conducted on companies listed on the Indonesia Stock exchange on indexed LQ 45 for period of 2016-2018. The sample was selected for 25 companies. The method of analysis uses associate descriptive analysis with  path analysis. Based on the results of the study found that corporate governance and culture promotion indirectly effect on financial performance with firm market value as intervening variable.

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