The future of…

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The future of boardrooms

February 2001

Boardrooms are the place where some of the decisions affecting the future of a company are made, where empires are made and lost. In a higher techno-literate company, computers are used to give presentations, demonstrations, to access information and the results of studies that affect decisions, to take notes. They may occasionally be used to try out alternative scenarios in a business model.

But these computers don’t yet make decisions, they don’t have a seat on the board, and the boardroom is always a physical place. These things and more are about to change.

Many companies have people working all over the world and many people have teleworked for ages. As e-commerce takes off, we will see increasing use of teleworking technologies and we will also see massive growth in the number of virtual companies. These are companies where a small core of key people (even just one) make use of contract staff who are hired for a particular project and disbanded after it is completed. In such a world, there are obvious consequences for the board. Firstly, many of the members may be on the board for a very short time and may never have met physically. Secondly, they may well be dispersed globally. Thirdly, the structures that they command and represent may be very temporary. Many of the conventional structures in organisations may not be represented at all. And finally, many of the traditional roles may well be better accomplished automatically by software and machine intelligence. If the board exists at all in such a company, it will have very different characteristics. And if the members are geographically dispersed, having to bring them physically together is very expensive and time consuming.

But virtual companies will have opposition from virtual co-operatives. Virtual companies are formed top down, keeping a group of key employees and bringing the workers in on a per-contract basis. These workers have skills to address that problem, and it is entirely feasible that they can be automatically linked together by business matching software. Such software will be an important component of future e-business, identifying needs, finding, and linking people and other resources to satisfy the need. The people and resources brought together for this purpose could be managed by the board of a virtual company, but they don't have to be, they could work simply as freelancers, dividing all the proceeds for themselves. The business need is satisfied and the workers are happy. There is no board, and certainly no boardroom. In this case, it is this function that has been replaced by software. Such virtual co-operatives will be strong competition to virtual companies. The model doesn't work well for all business types but it does for many.

Shared space technology will soon allow people to meet in virtual boardrooms, with full eye contact, life size images and full body language. The computer simply takes their image and wraps it around a wire frame model to produce a high quality imitation, or avatar. This avatar can behave in any way the owner chooses. It can either replicate the owner's real-time actual movements, or behave according to predetermined rules. For instance, it could act out a 'recording', follow a script, or in the further future, actually emulate the owner's behaviour and responses. You could stay in the bath and have your avatar substitute for you! Whether the shareholders would be happy with your avatar making corporate decisions is another matter.

Machine intelligence is still far from catching up with people in many respects, although there are obviously some areas where the gap is closing fast. However, it is also true that there are often some board members who are there because of skills appropriate to older times rather than their suitability for the job in hand, so they represent less of a challenge for computers. One thing is clear. Every year, some things that used to need human intelligence are taken over by machines. One day there will be little left that people can do that machines can't. They will overtake us in overall terms between 2015 - 2020. After that, machines may be making most of the decisions, as well as doing most of the work. Many companies that just process information, organise things, or act as agents, will physically disappear, replaced by software that can roam around the network, avoiding corporation tax, but making at least as much money as its human based ancestors. The boardroom will be in cyberspace, and the directors will just be different chunks of software coupled to a variety of sensors and databases.

But some companies will still do things that need people. Many jobs have a human element and this will often survive and even increase. Board representation of these activities and indeed human employees will probably stay human, even when other responsibilities are taken over by machines. Whether the chief executive is human or machine really depends on the style of company. We may feel more comfortable with a human at the top, but ultimately, the bottom line is what counts for most companies. Business is business.